Al-Faisaly Football Club v. Alexander Merkel, Gazisehir Futbol Kulübü (GFK) A.S.

II. INTRODUCTION

5. The present appeal arbitration procedure concerns an employment-related dispute between Al- Faisaly and the Player.

6. Following claims lodged by both Al-Faisaly as well as the Player, the Dispute Resolution Chamber of FIFA (the “FIFA DRC”) decided that Al-Faisaly had no just cause to terminate the employment contract with the Player (the “Employment Contract”) and that Al-Faisaly was liable to pay outstanding remuneration in an amount of EUR 95,455.50 net and compensation for breach of contract in an amount of EUR 1,100,008 net to the Player, plus interest (the “Appealed Decision”).

7. Al-Faisaly is challenging the Appealed Decision before the Court of Arbitration for Sport (“CAS”), claiming i) that it had just cause to terminate the Employment Contract; ii) that the

Player shall not be awarded compensation, but that instead Al-Faisaly shall be awarded compensation for breach of contract from the Player in the amount of EUR 1,200,000 plus interest; and iii) that this case be sent back to the FIFA DRC for the imposition of sporting sanctions on the Player. Subsidiarily, Al-Faisaly requests for the amount of outstanding compensation to be reduced. The Player requests the Appealed Decision to be confirmed.

VI. JURISDICTION

54. Article R47 CAS Code provides the following:

“An appeal against the decision of a federation, association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the Appellant has exhausted the legal remedies available to it prior to the appeal, in accordance with the statutes or regulations of that body”.

55. The jurisdiction of CAS, which is not disputed, derives from Article 57(1) FIFA Statutes (May 2021 Edition), as it determines that “[a]ppeals against final decisions passed by FIFA’s legal bodies and against decisions passed by confederations, member associations or leagues shall be lodged with CAS within 21 days of receipt of the decision in question”, and Article R47 CAS Code. The jurisdiction of CAS is not contested and is further confirmed by the Order of Procedure duly signed by the Parties.

56. It follows that CAS has jurisdiction to adjudicate and decide on the present dispute.

VII. ADMISSIBILITY

57. The appeal was filed within the deadline of 21 days set by Article 57(1) FIFA Statutes. The appeal complied with all other requirements of Article R48 CAS Code, including the payment of the CAS Court Office fee.

58. It follows that the appeal is admissible.

VIII. APPLICABLE LAW

59. Article R58 CAS Code provides as follows:

“The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law that the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

60. Article 56(2) FIFA Statutes provides the following:

“The provisions of the CAS Code of Sports-related Arbitration shall apply to the proceedings. CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss law”.

61. With reference to Article R58 CAS Code and Article 56(2) the Parties agree that the current dispute should be decided applying the FIFA RSTP as well as Swiss law. Al-Faisaly initially maintained that Egyptian law was subsidiarily applicable in its Statement of Appeal, but indicated in its Appeal Brief that Swiss law was subsidiarily applicable.

62. Al-Faisaly and Gazişehir do not refer to any particular edition of the FIFA RSTP, whereas the Player maintains that the February 2021 edition applies.

63. The Panel agrees that the applicable regulations are the Statutes and various regulations of FIFA, in particular the FIFA RSTP. However, as to the applicable edition of the FIFA RSTP, the Panel notes that, since the Player’s claim was lodged with the FIFA DRC on 30 September 2021, the August 2021 edition (and not the February 2021) is applicable, as was also held by the FIFA DRC in the Appealed Decision.

64. Additionally, in accordance with Article 56(2) FIFA Statutes, Swiss law is applicable should the need arise to fill a possible gap in the various rules of FIFA.

IX. MERITS — A. The Main Issues

65. The main issues to be resolved by the Panel are the following:

i. Did Al-Faisaly have just cause to terminate the Employment Contract?

ii. What are the consequences thereof?

i. Did Al-Faisaly have just cause to terminate the Employment Contract?

66. Since Al-Faisaly terminated the Employment Contract on 16 August 2021, Al-Faisaly has the burden of proof to establish that it had just cause to do so.

67. In the Termination Notice dated 16 August 2021, and in these proceedings, Al-Faisaly invoked “the drop of [the Player’s] technical level and showing la moubalat [sic] to improve your performance”, and “pushing the club, by your behaviour, to terminate the [Employment Contract] and take the full contract value with bad faith” for terminating the Employment Contract.

68. On the other hand, the Player holds that he did not breach any of his contractual obligations, that a drop of sporting performance cannot qualify as a just cause for termination and that he did not act in an abusive manner aimed at forcing Al-Faisaly to terminate the Employment Contract, but that it was rather Al-Faisaly that did not comply with its contractual obligations by, inter alia, deregistering the Player and forcing him to train separated from the first team.

a) The Regulatory Framework Applicable to Assessing the Termination of an Employment Contract

69. Article 14 FIFA RSTP provides as follows:

“1. A contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause.

2. Any abusive conduct of a party aiming at forcing the counterparty to terminate or change the terms of the contract shall entitle the counterparty (a player or a club) to terminate the contract with just cause ”.

70. Besides the general Article 14, the FIFA RSTP also provide for more specific reasons to terminate an employment relationship, namely Article 14bis (terminating a contract for outstanding salaries) and Article 15 (sporting just cause), but these provisions are not invoked in the matter at hand.

71. Rather, Al-Faisaly maintains that the behaviour of the Player qualifies as “abusive conduct” in the sense of Article 14(2) FIFA RSTP and that the actions of the Player generally constituted a just cause to terminate the employment relationship.

72. As to the general provision of Article 14(1) FIFA RSTP, it is longstanding and consistent CAS jurisprudence that:

“The RSTP 2001 do not define when there is “just cause” to terminate a contract. In its established legal practice, CAS has therefore referred to Swiss law in order to determine the purport of the term “just cause”. Pursuant to this, an employment contract which has been concluded for a fixed term, can only be terminated prior to expiry of the term of the contract if there are “valid reasons” or if the parties reach mutual agreement on the end of the contract (see also ATF 110 I 167; WYLER R., Droit du travail, Berne 2002, p. 323 and STAEHELIN/VISCHER, Kommentar zum Schweizerischen Zivilgesetzbuch, Obligationenrecht, Teilband V 2c, Der Arbeitsvertrag, Art. 319-362 OR, Zurich 1996, marg. no. 17 ad Art. 334, p. 479). In this regard Art. 337 para. 2 of the Code of Obligations (CO) states – according to the translation into English by the Swiss-American Chamber of Commerce: “A valid reason is considered to be, in particular, any circumstances under which, if existing, the terminating party can in good faith not b e expected to continue the employment relationship”. According to Swiss case law, whether there is “good cause” for termination of a contract depends on the overall circumstances of the case (ATF 108 II 444, 446; ATF 2 February 2001,4C.240/2000 no. 3 b aa). Particular importance is thereby attached to the nature of the breach of obligation. The Swiss Federal Supreme Court has ruled that the existence of a valid reason has to be admitted when the essential conditions, whether of an objective or personal nature, under which the contract was concluded are no longer present (ATF 101 Ia 545). In other words, it may be deemed to be a case for applying the clausula rebus sic stantibus (ATF 5 May 2003,4C.67/2003 no. 2). According to Swiss law, only a breach which is of a certain severity justifies termination of a contract without prior warning (ATF 127 III 153; ATF 121 III 467; ATF 117 II 560; ATF 116 II 145 and ATF 108 II 444, 446). In principle, the breach is considered to be of a certain severity when there are objective criteria which do not reasonably permit an expectation that the employment relationship between the parties be continued, such as a serious breach of confidence (ATF 2 February 2001,4C.240/2000 no. 3 b aa; ATF 5 May 2003,4C.67/2003 no. 2; WYLER R., op. cit., p. 364 and TERCIER P., Les contrats spéciaux, Zurich et al. 2003, no. 3402,

p. 496). Pursuant to the established case law of the Swiss Federal Supreme Court, early termination for valid reasons must, however, be restrictively admitted (ATF 2 February 2001,4C.240/2000 no. 3 b aa; ATF 127 III 351; WYLER R., op. cit., p. 364 and TERCIER P., op. cit., no. 3394, p. 495)” (CAS 2006/A/1180, para. 25 of the abstract published on the CAS website).

73. The Panel fully adheres to such jurisprudence, which was followed in recent CAS cases (cf. 113). The Panel will therefore examine whether the Player’s conduct was of such a nature that Al-Faisaly had just cause to terminate the Employment Contract, i.e. whether it could or could not be reasonably expected to continue its employment relationship with the Player.

74. In making such assessment, and given Al-Faisaly’s allegation that the Player pushed it to terminate the Employment Contract, the Panel will also consider the applicability of Article 14(2) FIFA RSTP.

75. The Panel notes that Article 14(2) was newly implemented in the June 2018 version of the FIFA RSTP. In FIFA Circular no. 1625 dated 26 April 2018 it is, inter alia, explained to the stakeholders that Article 14 FIFA RSTP “has been amended to include a new paragraph concerning abusive situations where the stance of a party (either a player or a club) is intended to force the counterparty to terminate or change the terms of the contract”.

b) Assessment of the Player’s Conduct

76. Again, given that Al-Faisaly terminated the Employment Contract, the burden of proof in establishing that such premature termination was justified lies with Al-Faisaly.

77. The Panel notes that the relationship between the Player and Al-Faisaly deteriorated at the start of the 2021/22 season. The Panel recalls that, in line with the Termination Notice, Al - Faisaly invoked two reasons for the termination of the Employment Contract: i) the drop in sporting performance; and ii) the Player’s pushing of Al-Faisaly to terminate the Employment Contract and take the full contract value.

1) The Alleged Drop in the Player’s Sporting Performance

78. As to the drop in sporting performance of the Player, the Panel holds that such drop in sporting performance in principle cannot constitute a “just cause” to terminate an employment contract with a football player. In this regard, the Panel agrees with the approach taken in CAS 2016/A/4846, which states that:

“[T]he Panel finds that it is intrinsic to sport in general, and football in particular, that competition is fierce and that athletes frequently overachieve or underachieve. This is literally and figuratively “part of the game”. If clubs were permitted to terminate employment contracts of alleged underachieving players, the concept of pacta sunt servanda, one of the principal pillars in the FIFA RSTP, would be seriously undermined. If a player consistently does not show a preparedness to improve his performance and to comply with the club’s directions, deliberately playing below his level, in other words if wilful misconduct is proven, this may well lead to a justified termination, but if a player is perceived to underachieve while showing no lack of dedication, a termination for the sole reason of poor performance cannot be considered to constitute a just cause to terminate the contract in the absence of strict contractual language, particularly so because the term of employment contracts in football are restricted to a maximum term of 5 years”.

79. Additionally, the Panel finds that, in this particular case, and taking into account the abovementioned framework, no drop in the performance of the Player has been established. As argued by the Player during the hearing, Al-Faisaly did not present any technical report demonstrating that there was a drop in the Player’s technical level.

80. Even if such drop in performance had been established, this would have not been a valid basis for Al-Faisaly to terminate the Employment Contract without notice. For such reason to be considered, at the very least a strong and abusive lack of dedication on the side of the Player would be required. However, besides a lack of evidence of any drop in performance, there is also no evidence of any lack of dedication on the side of the Player.

81. What is more, before deciding to terminate the Employment Contract because of an alleged drop in the performance of the Player, the Panel finds that Al-Faisaly should at least (potentially repeatedly) have warned and sanctioned the Player internally, before proceeding with a termination. As indicated in the Appealed Decision, termination of an employment contract is an ultima ratio.

82. Consequently, the Panel is satisfied that the alleged drop in the Player’s sporting performance has not been proven and that, in any event, it would not justify the termination of the Employment Contract by Al-Faisaly.

2) The Player’s Alleged Abusive Conduct

83. As to the “pushing to take the full contract value”, the Panel finds that Al-Faisaly failed to submit any corroborating evidence of the Player’s alleged abusive behaviour aimed at forcing Al - Faisaly to terminate the Employment Contract in the sense of Article 14(2) FIFA RSTP.

84. During the hearing, the Player referred to the FIFA Commentary on the Regulations on the Status and Transfer of Players (edition 2021) (the “FIFA Commentary”) with respect to Article 14(2) FIFA RSTP. The Panel notes that the FIFA Commentary provides, inter alia, as follows in this respect:

“A player’s conduct can also qualify as abusive within the meaning article 14 paragraph 2. One potential example might occur if a player wishes to leave their club prematurely to join a new club, but their current club refuses to release them. To force the club to agree to the transfer, the player might start refusing to train or to participate in matches, coming up with various excuses for their behaviour. Under such circumstances the club might have just cause to terminate the contract; after all, the player would appear to be in breach of their main contractual obligations. However, by terminating the contract, the club would be doing exactly what the player wants. While compensation might become payable to the club because of the termination, it would lose the player and their special skills.

Just as a player alleging abusive conduct by a club is responsible for proving that the misconduct took place, the burden of proof in respect of alleged abusive conduct by a player lies with the club” (FIFA Commentary, p. 112).

85. In support of its allegation that the Player acted abusively, Al-Faisaly merely relies on correspondence exchanged with the Player by means of which the Player insisted on receiving the entire remaining value of the Employment Contract and that he would otherwise not agree with an earlier termination of the Employment Contract.

86. The Panel finds that insisting on the performance of the Employment Contract and only conditionally agreeing to an earlier termination thereof cannot be considered as “abusive behaviour” in the context of Article 14(2) FIFA RSTP. As a matter of fact, the Panel deems that the Player was acting in accordance with the principles of contractual stability and pacta sunt servanda by insisting on the full performance of the Employment Contract. For an employing club, to argue that a player acted with bad faith because he was not prepared to waive any of his contractual entitlements is, quite frankly, inacceptable.

87. The Panel also finds that the Player was by no means required to accept any proposal from Al-Faisaly to be transferred on loan to another club. The Player was entitled to insist on the performance of the Employment Contract.

88. There is no indication on file that the Player would have refused to participate in training sessions or of matches of Al-Faisaly.

89. There is no evidence of any negotiations having taken place between the Player and Gazişehir before Al-Faisaly terminated the Employment Contract. The Panel does not consider it strange or unusual that the Player signed the Gazişehir Contract three days after the Employment Contract was terminated by Al-Faisaly. In any event, even if the Player had already discussed the terms of a potential future employment contract with Gazişehir, the Panel does not consider this to be inappropriate. Indeed, considering the stance taken by Al- Faisaly and that Al-Faisaly provided the Player with a draft termination agreement, it was probably clear for the Player that his employment relationship with Al-Faisaly was coming to an end. It would therefore not have been unreasonable for the Player to explore contingency options. Al-Faisaly’s allegations in this respect may have been relevant had the Player terminated the Employment Contract, but such decision was a unilateral decision taken by Al-Faisaly.

90. In any event, as argued by the Player, and as assessed in more detail below, the fact that the Player found alternative employment so quickly after his Employment Contract was terminated comes to the advantage of Al-Faisaly, because any such alternative salary earned is a mitigation of the Player’s damages and justifies a reduction of the amount of compensation for breach of contract otherwise due to the Player by Al-Faisaly.

91. Al-Faisaly’s contention that the Player would have steered towards a termination of the Employment Contract because he would allegedly earn double the salary with Gazişehir is clearly contradicted by the content of the Gazişehir Contract. Indeed, whereas the Player earned EUR 1,1 million net and EUR 1,3 million net per season with Al-Faisaly, with Gazişehir he was entitled to guaranteed remuneration of EUR 115,000 net for the first season and EUR 565,000 net for the second season, i.e. significantly less than he earned with Al- Faisaly.

92. Finally, although the Player advances a number of arguments as to why he should have been entitled to terminate the Employment Contract with just cause, the Panel does not consider it necessary to assess such arguments, because the decisive question is whether Al-Faisaly had just cause to terminate the Employment Contract and this question is already answered in the negative.

93. Consequently, the Panel finds that Al-Faisaly did not have just cause to terminate the Employment Contract on 16 August 2021.

ii. What are the consequences thereof?

a) The claim filed by Al-Faisaly

94. In light of the conclusion that Al-Faisaly did not have just cause to terminate the Employment Contract, Al-Faisaly’s claim for the amount of EUR 1,200,000 as compensation for breach of contract by the Player is dismissed. Also, Al-Faisaly’s request that this case be

sent back to the FIFA DRC for the possible application of sporting sanctions on the Player is dismissed, all this leaving open the theorical issue whether it can be admitted that Al- Faisaly raised or not a claim against Gazişehir.

95. Rather, the Panel will assess below whether the Player is entitled to receive any outstanding remuneration from Al-Faisaly and whether any compensation for breach of contract is to be paid.

b) Outstanding Salaries

96. With respect to the Player’s claim for outstanding salaries, the FIFA DRC decided in the Appealed Decision that Al-Faisaly, in accordance with the principle of pacta sunt servanda, was liable to pay the Player EUR 95,455.50 net. This amount corresponds to the Player’s salaries of July 2021 (EUR 63,637 net) and the salary of August 2021 until the end of the first year of the Employment Contract, i.e. 15 August 2021 (EUR 31,818.50 net).

97. Al-Faisaly did not submit any specific arguments as to why such calculation would be incorrect or why such amount should not be due to the Player.

98. The Panel finds it reasonable and fair that Al-Faisaly pays the Player the remuneration that was outstanding at the time Al-Faisaly terminated the Employment Contract, i.e. the amount of EUR 95,455.50 net.

99. As to the interest to be awarded over such amounts, the Employment Contract provides that the monthly salary is payable “no later than the day 15th of the next month”.

100. Article 102(2) SCO further provides that “[w]here a deadline for performance of the obligation has been set by agreement or as a result of a duly exercised right of termination reserved by one party, the obligor is automatically in default on expiry of the deadline”, while, in accordance withe Article 104 SCO default interest is of 5% per annum.

101. The July 2021 salary therefore fell due on 15 August 2021.

102. As to the August 2021 salary, despite the fact that it had not formally fallen due on the date of termination of the Employment Contract, given that the Player was employed and provided services for Al-Faisaly in the first half of the month of August 2021, the Panel finds that the Player is entitled to such outstanding remuneration.

103. Indeed, Article 339(1) SCO provides as follows:

“When the employment relationship ends, all claims arising therefrom fall due”.

104. Accordingly, the Panel finds that interest over the August 2021 fell due as from the date following 16 August 2021, i.e. the date of termination of the Employment Contract.

105. Furthermore, Article 73(1) SCO provides as follows:

“Where an obligation involved the payment of interest but the rate is not set by contract, law or custom, interest is payable at the rate of 5% per annum”.

106. Consequently, the Panel decides that, in confirmation of what was pronounced in the Appealed Decision, interest at a rate of 5% per annum is due over the amount of EUR 63,637 as from 15 August 2021 and over the amount of EUR 31,818.50 as from 17 August 2021.

c) The Regulatory Framework applicable to Awarding Compensation for Breach of Contract

107. Having established that Al-Faisaly had no just cause to terminate the Employment Contract on 16 August 2021, the Panel will now deal with the issue of compensation for breach of contract.

108. The Panel finds that the amount of compensation for breach of contract to be paid by Al- Faisaly to the Player is to be determined on the basis of Article 17(1) FIFA RSTP. Article 17(1) FIFA RSTP provides as follows:

“The following provisions apply if a contract is terminated without just cause:

1) In all cases, the party in breach shall pay compensation. Subject to the provisions of article 20 and Annexe 4 in relation to training compensation, and unless otherwise provided for in the contract, compensation for the breach shall be calculated with due consideration for the law of the country concerned, the specificity of sport, and any other objective criteria. These criteria shall include, 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, the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.

Bearing in mind the aforementioned principles, compensation due to a player shall be calculated as follows:

i. in case the player did not sign any new contract following the termination of his previous contract, as a general rule, the compensation shall be equal to the residual value of the contract that was prematurely terminated;

ii. in case the player signed a new contract by the time of the decision, the value of the new contract for the period corresponding to the time remaining on the prematurely terminated contract shall be deducted from the residual value of the contract that was terminated early (the “Mitigated Compensation”). Furthermore, and subject to the early termination of the contract being due to overdue payables, in addition to the Mitigated Compensation, the player shall be entitled to an amount corresponding to three monthly salaries (the “Additional Compensation”). In case of egregious circumstances, the Additional Compensation may be increased up to a maximum of six monthly salaries. The overall compensation may never exceed the rest value of the prematurely terminated contract.

iii. Collective bargaining agreements validly negotiated by employers’ and employees’ representatives at domestic level in accordance with national law may deviate from the principles stipulated in the points i. and ii. above. The terms of such an agreement shall prevail”.

109. The Panel takes due note of previous CAS jurisprudence establishing that the purpose of Article 17(1) FIFA RSTP is to reinforce 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 (CAS 2008/A/1519-1520, para. 80, with further references to: CAS 2005/A/876, p. 17: “[…] it is plain from the text of the FIFA Regulations that they are designed to further ‘contractual stability’ […]”; CAS 2007/A/1358, para. 90; CAS 2007/A/1359, para. 92: “[…] the ultimate rationale of this provision of the FIFA Regulations is to support and foster contractual stability […]”; confirmed in CAS

110. In respect of the calculation of compensation in accordance with Article 17(1) FIFA RSTP and the application of the principle of “positive interest”, the Panel follows the framework set out by a previous CAS panel as follows:

“When calculating the compensation due, the judging body will have to establish the damage suffered by the injured party, taking in consideration the circumstances of the single case, the arguments raised by the parties and the evidence produced. Of course, it is the injured party that requests compensation who bears the burden of making, as far as possible, sufficient assertions and who bears as well the burden of proof.

As it is the compensation for the breach or the unjustified termination of a valid contract, the judging authority shall be led by the principle of the so-called positive interest (or “expectation interest”), i.e. it will aim at determining an amount which shall basically put the injured party in the position that the same party would have had if the contract was performed properly, without such contractual violation to occur. This principle is not entirely equal, but is similar to the praetorian concept of in integrum restitution, known in other law systems and that aims at setting the injured party to the original state it would have if no breach had occurred.

The fact that the judging authority when establishing the amount of compensation due has a considerable scope of discretion has been accepted both in doctrine and jurisprudence (cf. CAS 2008/A/1453-1469, N 9.4; CAS 2007/A/1299, N 134; CAS 2006/A/1100, N 8.4.1. In relation to Swiss employment law, see Streiff/von Kaenel, Arbeitsvertrag, Art. 337d N 6, and Staehelin, Zürcher Kommentar, Art. 337d N 11 – both authors with further references; see also Wyler, Droit du travail, 2nd ed., p. 523; see also the decision of the Swiss Federal Tribunal BGE 118 II 312f.) (…).

The principle of the “positive interest” shall apply not only in the event of an unjustified termination or a breach by a player, but also when the party in breach is the club. Accordingly, the judging authority should not satisfy itself in assessing the damage suffered by the player by only calculating the net difference between the remuneration due under the existing contract and a remuneration received by the player from a third party. Rather, the judging authority will have to apply the same degree of diligent and transparent review of all the objective criteria, including the specificity of sport, as foreseen in art. 17 FIFA Regulations” (CAS 2008/A/1519-1520, para. 85 et seq. of the abstract published on the CAS website).

111. Considering the development in CAS jurisprudence, this is now the common approach adopted by CAS panels (see, inter alia, CAS 2018/A/6017, CAS 2017/A/5366, CAS 2016/A/4843, CAS & 1520). As such, CAS panels have a considerable discretion in determining the amount of

compensation to be paid, which has been accepted in CAS jurisprudence (see, inter alia, CAS

112. The Panel finds that the legal framework set out above and the principle of positive interest are applicable to the present case and adheres thereto. Against this background, the Panel will proceed to assess the Player’s objective damages, before applying its discretion in adjusting this total amount of objective damage to an appropriate amount of damages, if deemed necessary, in particular in considering the Al-Faisaly’s argument that the alleged contributory negligence of the Player should result in the consequence that the amount of compensation for breach of contract otherwise payable is to be reduced on such basis.

d) Determining the Amount of Compensation for Breach of Contract

113. In view of the above, the Panel is satisfied that the Player is entitled to compensation for breach of contract on the basis of Article 17(1) FIFA RSTP, in the light of the principle of the “positive interest” as specified above and with due consideration of the duty to mitigate damages according to Swiss law which is consistent with CAS jurisprudence.

114. At the outset, the Panel notes that it is undisputed between the Parties that the residual value of the Employment Contract amounts to EUR 1,200,008 net, as this was the amount payable to the Player by Al-Faisaly between the moment of termination until the Employment Contract would have expired on 14 July 2022. Because Al-Faisaly terminated the Employment Contract without just cause, it deprived the Player of such income, which therefore comprise damages for the Player.

115. However, it is undisputed that the termination without just cause by Al-Faisaly enabled the Player to conclude the Gazişehir Contract, initially valid as from 19 August 2021 until 31 May 2023. In accordance with the Gazişehir Contract, the Player was entitled to a guaranteed remuneration of EUR 115,000 net (EUR 100,000 salary and EUR 15,000 lump sum payment) for the season 2021/2022 and EUR 565,000 net (EUR 550,000 salary and EUR 15,000 lump sum payment) for the season 2022/2023.

116. Al-Faisaly maintains that such arrangement between the Player and Gazişehir was made in bad faith, as the difference in salary between the first and the second year is very large. Al - Faisaly requests that the amount of compensation for breach of contract to be awarded to the Player is to be reduced on such basis.

117. During the hearing, following a question of counsel for Al-Faisaly, counsel for Gazişehir indicated that the division of salary between the first and the second year of the Gazişehir Contract was made upon the request of the Player. Although counsel for Gazişehir later somewhat tried to nuance such initial statement by indicating that the difference in salary between the first and the second season was the result of a deal with the Player and that dividing it equally would have been possible as well, the Panel finds that this does not take away the veracity of his initial statement.

118. When assessing the Player’s objective damages, the Appealed Decision took into account the salary the Player was entitled to receive under the Gazişehir Contract during the period of overlap between the Employment Contract and the Gazişehir Contract and applied a mitigation of EUR 100,000. The FIFA DRC thus only considered the Player’s salary under the Gazişehir Contract and not the lump sum payment of EUR 15,000. The Panel finds that an argument could be made that also the lump sum payment is to be considered as mitigation as it was a guaranteed payment, but notes that Al-Faisaly did not challenge this aspect and consistently referred to a mitigation of EUR 100,000 during its pleadings.

119. The Panel therefore finds that only the amount of EUR 100,000 should in principle be deducted from the amount of compensation otherwise payable to the Player by Al -Faisaly.

120. Furthermore, insofar as the duty to mitigate damages is concerned, Article 337c(2) SCO provides the following:

“The employee must permit a set-off against this amount for what he saved because of the termination of the employment relationship, or what he earned from other work, or what he has intentionally failed to earn ”.

121. Accordingly, not only the effective mitigation is relevant to be taken into account, but also amounts intentionally failed to be earned by the Player. Such duty also generally stems from Article 2 of the Swiss Civil Code (the “SCC”), which provides as follows:

“1. Every person must act in good faith in the exercise of his or her rights and in the performance of his or her obligations.

2. The manifest abuse of a right is not protected by law”.

122. In CAS jurisprudence, inter alia, the following has been determined:

“As already noted above, according to Article 337c(2) of the SCO, the duty of mitigation is related to the rule that the employee must permit a set-off against the amount of compensation for what he saved because of the termination of the employment relationship, or what he earned from other work, or what he has intentionally failed to earn.

In the opinion of the Panel, such a rule implies that, in accordance with the general principle of fairness, the injured player must act in good faith after the breach by the club and seek for other employment, showing diligence and seriousness. The Panel considers that this principle is aimed at limiting the damages deriving from the breach and at avoiding that a possible breach committed by the club could turn into an unjust enrichment for the injured party.

Moreover, the wording of Article 337c(2) of the SCO, with reference to what the employee intentionally failed to earn, suggests that the duty to mitigate should not be considered satisfied when, for example, the player deliberately fails to search for a new club or unreasonably refuses to sign a satisfying employment contract, or when, having different options, he deliberately accepts to sign the contract with worse financial conditions, in the absence of any valid reason to do so” (CAS 2016/A/4605, paras. 7.31-7.33 of the abstract published on the CAS website).

123. The Panel concurs with this reasoning and finds that the Player was therefore generally required to not intentionally forego any salary during the remaining term of the Employment Contract to fulfil his duty to mitigate his damages in good faith.

124. In this respect, it is to be noted that there is a significant difference between the salaries the Player was entitled to receive in the first season (EUR 100,000) and the second season (EUR 550,000) under the Gazişehir Contract.

125. Had the Player’s total guaranteed salary under the Gazişehir Contract (EUR 650,000 net) been divided equally over the 2021/2022 and the 2022/2023 seasons, the mitigation to be applied would have been significantly larger than the mitigation of EUR 100,000 applied by the FIFA DRC in the Appealed Decision and Al-Faisaly would have been required to pay a significantly lower amount of compensation for breach of contract. Al-Faisaly is therefore disadvantaged by such arrangement between the Player and Gazişehir.

126. Contrarily, for the Player it is beneficial to allocate as much of the total guaranteed salary under the Gazişehir Contract as possible to the second season, because such salary is not considered for the purposes of mitigation, whereas the salary for the first season is deducted from the amount of compensation to be received from Al-Faisaly.

127. As to the third party involved in this constellation, besides a general interest in postponing payment obligations as much as possible, there does not appear to be any particular interest for Gazişehir in how to allocate the total amount of salary payable between the first and the second season. In fact, as mentioned above, counsel for Gazişehir indicated that the division of salary between the first and the second year of the Gazişehir Contract was made upon the request of the Player.

128. Against such background, the Panel finds that one must be mindful of potential exploitation by football players involved in employment-related disputes as the present to create a disbalance between the overall value of a new employment contract and the salary payable during the period covered by the original employment contract of the player’s previous club that was terminated early.

129. In these proceedings, Al-Faisaly requested the Player to produce the Gazişehir Contract in order to be able to determine the mitigated damages, with which request the Player and Gazişehir voluntarily complied. The Player did not present any reason for the significant difference between the salary for the first season and the second season, in which the Player earned almost 6 times more than in the first season, besides a general reference that it is common practice that salary increases throughout the term of an employment contract.

130. The Panel finds that, while a certain increase in salary over the course of an employment contract is indeed common practice and not indicative of abuse, the difference between the salary under the first and the second season of the Gazişehir Contract is inexplicably large. In addition, the difference has been requested by the Player, not by Gazişehir.

131. Given the fact that Al-Faisaly was not privy to the contract negotiations between the Player and Gazişehir concerning the Gazişehir Contract, the Panel finds that the burden for Al - Faisaly to establish that the Player intentionally failed to earn a higher salary in the first season of the Gazişehir Contract is met in the matter at hand.

132. However, the Panel finds that it would be unjust to simply divide the Player’s total guaranteed salary under the Gazişehir Contract in two (EUR 650,000 / 2 = EUR 325,000) and take the amount of EUR 325,000 into account as the Player’s mitigation of his damages. As indicated, it is common practice in employment contracts in football that salary increases over time. Furthermore, the Panel finds that, generally, football players finding themselves in the position of the Player, i.e. suffering from a breach of their employment contract due to no fault of their own, should not be particularly restrained in how to mitigate their damages. This consideration applies here, where the Player faced an earlier termination without just cause and immediately acted to mitigate his damage.

133. Based on all the above, and also considering the discretion afforded to it under Article 17(1) FIFA RSTP to take into account subjective elements in determining a reasonable and fair amount of compensation for breach of contract, the Panel is satisfied to accept that while the Player mitigated his damages with EUR 100,000 by concluding the Gazişehir Contract, he intentionally failed to earn at least a salary of EUR 200,000 over the first season. Accordingly, the Panel finds that the total amount of damages to be considered as having been mitigated is EUR 200,000. This amount shall be considered to include and solve the issue of whether the "salary" earned by the Player was EUR 100,000 or 115,000. In other words the amount of EUR 200,000 shall be deemed to correspond to the total of the mitigated damages.

134. Consequently, the Panel holds that, in accordance with Article 17(1) FIFA RSTP, the Player is entitled to receive a total amount of compensation for breach of contract of EUR 1,000,008 (EUR 1,200,008 – EUR 200,000) from Al-Faisaly.

e) The Player’s Alleged Contributory Negligence

135. On a subsidiary basis, Al-Faisaly maintains that, even in case the Panel is of the opinion that Al-Faisaly did not have just cause to terminate the Employment Contract and that Al-Faisaly has to pay compensation for breach of contract to the Player, any such compensation is to be reduced with 50% because of the Player’s alleged contributory negligence on the basis of Articles 43, 44 and Article 337b SCO.

136. Article 44(1) SCO provides as follows:

“Where the person suffering damage consented to the harmful act or circumstances attributable to him helped give rise to or compound the damage or otherwise exacerbated the position of the party liable for it, the court may reduce the compensation due or even dispense with it entirely”.

137. The Panel observes that CAS jurisprudence has, inter alia, held the following in respect of the application of Article 44(1) SCO:

“[…] [A]ccording to Article 44 para. 1 CO, compensation may be reduced if there are circumstances attributable to the injured party that helped to give rise to or increase the damage” (CAS 2014/A/3647-3648, para. 121).

138. Article 337b SCO provides as follows:

“1. Where the good cause for terminating the employment relationship with immediate effect consists in breach of contract by one party, he is fully liable in damages with due regard to all claims arising under the employment relationship.

2. In other eventualities the court determines the financial consequences of termination with immediate effect at its discretion, taking due account of all the circumstances”.

139. CAS jurisprudence has also accepted that an amount of compensation for breach of contract may be reduced on such basis:

“[…] [T]he Panel notes that CAS jurisprudence has recognised that, in line with Article 337b(2) SCO, situations in which a unilateral breach of a contract cannot be deemed to have been caused exclusively by the conduct of one party, the Panel has to decide in its due discretion the financial consequences of such breach, taking into account all circumstances (cf. CAS 2003/O/453, para. 45; CAS 2005/A/865, para. 45; CAS

140. The Panel agrees with Al-Faisaly that the afore-mentioned provisions could in theory be applied and could therefore lead to a reduction of the amount of compensation for breach of contract otherwise payable.

141. However, in the matter at hand, the Panel finds that there is no evidence on file whatsoever suggesting that the Player in any way contributed to the termination of the employment relationship. The alleged conduct of which Al-Faisaly accuses the Player is addressed in more detail above and has been dismissed by the Panel.

142. Consequently, the Panel finds that there is no contributory negligence on the side of the Player and that the afore-mentioned amount of compensation for breach of contract, i.e. EUR 1,000,008, is not to be reduced on this basis.

f) Interest over the Amount of Compensation Awarded

143. Finally, on the basis of the afore-mentioned Article 339(1) SCO, the Panel finds that Al- Faisaly is in principle required to pay interest at a rate of 5% per annum over the amount of EUR 1,000,008 as from 17 August 2021 (i.e. the day following the day on which the Employment Contract was terminated) until the date of effective payment.

144. However, the Panel notes that the FIFA DRC only awarded interest as from 30 September 2021 in the Appealed Decision (i.e. the date the Player lodged his claim with FIFA).

145. Since the Player did not file an appeal against the Appealed Decision, because Al-Faisaly cannot be prejudiced by its appeal and in line with the principle of ne ultra petita, the Panel finds that it is barred from awarding interest as from 17 August 2021 and therefore confirms the Appealed Decision, awarding interest at a rate of 5% per annum as from 30 September 2021 until the date of effective payment.

B. Conclusion

146. Based on the foregoing, the Panel holds that:

i) Al-Faisaly terminated the Employment Contract without just cause on 16 August 2021;

ii) The Player is entitled to receive from Al-Faisaly outstanding remuneration in the amount of EUR 63,637 net, plus interest at a rate of 5% p.a. as from 15 August 2021 until the date of effective payment;

iii) The Player is entitled to receive from Al-Faisaly outstanding remuneration in the amount EUR 31,818.50 net, plus interest at a rate of 5% p.a. as from 17 August 2021 until the date of effective payment;

iv) The Player is entitled to receive compensation for breach of contract from Al-Faisaly in the amount of EUR 1,000,008 net, plus interest at a rate of 5% p.a. as from 30 September 2021 until the date of effective payment.

147. Accordingly, Al-Faisaly’s appeal is partially upheld. All other and further motions or prayers for relief are dismissed.