Al-Arabi SC v. Juan Ignacio Martinez

II. FACTUAL BACKGROUND

3. Below is a summary of the main relevant facts and allegations based on the Parties’ written and oral submissions, and the evidence examined in the course of the present appeal arbitration proceedings and the hearing. Additional facts and allegations may be set out, where relevant, in connection with the legal discussion that follows. Although the Panel has considered all the facts, allegations, legal arguments and evidence submitted by the Parties in

the present proceedings, it refers in this Award only to the submissions and evidence it considers necessary to explain its reasoning.

A. Background of the dispute

4. On 10 June 2019, the Coach and the Club signed an employment contract (the “Contract”), valid as from the date of signature for “one sports season (2019/2020)”. According to article 7 of the Contract, the Club was to pay the Coach “a total amount 300000 $ […] which he receives $30,000 when he comes to start the preparation period during July 2019. The rest amount will be paid to the [Coach] equally as monthly salaries for ten months by 27000$ monthly […], net of taxes. The [Club] shall provide the tax certificates will assist the [Coach] in case there is any issue with the Kuwaiti and the Spanish tax authorities”.

5. On 28 September 2019, the Club provided a settlement agreement to the Coach with the purpose of terminating the employment relationship against the payment of USD 54,000.

6. On 1 October 2019, the Club informed the Coach that he had violated his employment contract by not training the first team properly on several occasions.

7. On 3 October 2019, the Coach replied that he disagreed with the accusations of the Club.

8. By letter of the same day, the Club informed the Coach that he was “not to train the first football team anymore and just to observe the U13 football team […] starting from 04/10/2019 at 05:30 PM”.

9. By letter dated 4 October 2019, the Coach, alongside the rest of the Coaches team, requested to be reinstated in his position as with immediate effect, arguing that the decision to reassign the Coaches team to the training of the U13 team instead of the first team was “a serious violation of our employment contracts, since [the club is] preventing us to perform our professional tasks in the first football team, as expressly referred in the contract”.

10. On the same day, the Club replied to the Coach’s letter by informing him that he was “to continue with his work as coach of the first football team”.

11. Still on 4 October 2019, the Coach and the Coaches team addressed a letter to the Club complaining about what they felt to be a mistreatment from the Club and informing the Club that they would not be able to lead the team for the match the following day (5 October) as they were not allowed to lead the trainings during the week prior to that match. Further, they informed the Club that they would be at the disposition of the first team from 6 October 2019.

12. On 5 October 2019, the Club send the Coach a warning as he and his team were absent from training and imposed a reduction of the equivalent of a day’s salary out of his monthly salary.

13. On 6 October 2019, the Coaches team replied to the Club, arguing that the sanction was outrageous and that the Club had cancelled a training of the first team without the agreement of the Coaches team. They further requested the sanction to be cancelled and to be informed

as to when the next training session was scheduled.

14. On 7 October 2019, that request was reiterated by the Coaches team which further requested to be reinstated as coaches in charge of the first team as they considered that they did not have all the decision-making power with regards to the first team.

15. On 9 October 2019, the Coaches team reiterated their request to be reinstated, and gave 3 days for the Club to remedy its default.

16. On 10 October 2019, the Club replied to the Coaches team informing it about the opening of disciplinary proceedings due to (i) missing training and showing insubordination, as stated in the Club’s letter dated 1 October 2019, (ii) the failure to take the training of the first team on 4 October 2019, and (iii) the failure to take the official match of 5 October 2019. In the said letter, the Club invited the Coach to provide his position on said accusation within 7 days. The letter finally stated that the Coach’s salary of September 2019 was “temporarily withheld until the Board of Directors renders its final decision”. Furthermore, the club informed the coach that he could not and should not “interpret such provisional measures as automatic termination without just cause by the club”. The Club invited the assistant coaches to join the training on the same day.

17. On the same day, the Coaches team replied that they were surprised that a disciplinary proceeding was opened and added that the fact that the assistant coaches were invited to train the team while the head coach was suspended was a “despicable strategy”. They further added that since all the contracts of the Coaches team were linked in accordance with Article 33 of the Contract, the club was not “entitled at all to request the assistant coaches to attend the training session”.

18. On 13 October 2019, the Coach and his team notified the Club that they unilaterally terminated their contracts, arguing that, in consequence of their letters dated 9 and 10 October 2019 and in the absence of a reaction of the Club to their request to be reinstated as coaches of the first team, they had just cause to terminate the contracts. The Coach gave the club 5 more days to solve the matter avoiding a FIFA procedure.

19. On the same date, the Club replied that only the Coach and Mr. Jiménez were suspended and that the assistant coaches were still in charge of the first team. The Club thus requested them to attend all trainings and considered their claims to be reinstated to be without legal basis.

20. On 16 October 2019, the Coaches team reconfirmed, via the Coach’s counsel, their termination of the Contract.

21. On the same day, the Club informed the Coach that it took good notice of the termination of the Contract with effect from 13 October 2019 and that it “accepted the repudiatory breaches committed” by the Coach and deemed the Contract to have been terminated without just cause, rendering the Coach liable to pay compensation for damages to the Club. It further informed the Coach that the salary of September 2019 was withheld “as a security measure to offset part of the club’s claims for damages”.

B. Proceedings before the FIFA Players’ Status Committee

22. On 23 October 2019, the Coach lodged a claim against the Club before the Players’ Status Committee of the FIFA for outstanding remuneration and compensation for breach of contract, requesting the total amount of USD 243,000, plus 5% interest p.a. as from 13 October 2019 until the date of effective payment, corresponding to:

a. USD 27,000 as outstanding remuneration for the salary of September 2019;

b. USD 216,000 as compensation for breach of contract, corresponding to 8 monthly salaries;

c. Additional net compensation to be determined by the FIFA PSC as part art, 17.1.ii of the FIFA RSTP, and/or specificity of sport, plus 5% interest as from 13 October 2019;

d. Declare that if any further amount is requested by the Spanish Tax Authorities after receiving the compensation, such extra amount directly originated from the receipt of the compensation in Spain shall be borne by the [C]lub;

e. Sporting sanctions to be imposed on the Club;

f. Procedural costs and legal fees at the expense of the Club.

23. On 27 February 2020, the Single Judge of the Players’ Status Committee rendered his decision (“Appealed Decision”) the grounds of which were notified to the Parties on 28 May 2020. The operative part of the Appealed Decision reads as follows:

“1. The claim of the Claimant, Juan Ignacio Martínez, is partially accepted.

2. The Respondent, Al-Arabi Sporting Club, has to pay to the Claimant within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 27,000, plus 5% interest p.a. as from 13 October 2019 until the date of effective payment.

3. Furthermore, the Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of USD 216,000 plus 5% interest p.a. as of 13 October 2019 until the date of effective payment as compensation for breach of contract.

4. Any further claim lodged by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under points 2 & 3 above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2 & 3 above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due to the Claimant in accordance with the above-mentioned number 2 & 3 are not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

8. The final costs of the proceedings in the amount of CHF 25,000 are to be paid by the Respondent, as follow:

8.1 The amount of CHF 5,000 has to be paid to the Claimant.

8.2 The amount of CHF 20,000 has to be paid to FIFA to the following bank account with reference to case no. 19-02027/syi: […]”.

24. In its version without grounds, the Appealed Decision contained a note relating to the findings of the decision to the findings of the decision according to which, pursuant to Articles 15 and 18 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber, a “request for the grounds of the decision must be received, in writing, within 10 days of receipt of notification of the findings of the decision. Failure to do so within the stated deadline will result in the decision becoming final and binding and the parties being deemed to have waived their rights to file an appeal. Whenever procedural costs are due, the grounds of the decision will only be notified to the party requesting the grounds and upon payment of the relevant procedural costs. If the procedural costs are not paid within 20 days of the notification of the findings, the request for the grounds shall be deemed to have been withdrawn. As a result, the decision will become final and binding and the relevant party will be deemed to have waived their right to file an appeal […]”.

25. In the Appealed Decision, the Single Judge:

- Concluded, after having analysed the circumstances surrounding the present matter and on basis of the documentation on file, that the Coach took all the possible measures to ensure the continuation of the Contract under correct terms, however to no avail as the Club did everything possible to frustrate the Coach to render the service for which he was contracted. This conduct of the Club includes demoting the Coach to the U13 team – on the basis of unsubstantiated alleged violations, which were not properly analysed or being dealt with in any disciplinary proceedings with the Coach’s right to be heard guaranteed, blatantly ignoring the principle of “Audi alteram partem”.

- Concluded, in light of the above and considering the non-payment of the Coach’s September 2019 salary together with the unlawful and male fide conduct of the Club, that the Coach terminated the Contract with just cause on 13 October 2019.

- Noted that it remained undisputed that the Coach’s salary for September 2019 in the amount of USD 27,000 remained unpaid and that the Club failed to provide any substantiated, reasonable and valid justification or reasons. Therefore, in accordance with the principle of pacta sunt servanda, the Single Judge held that the Club should pay the Coach outstanding remuneration in the amount USD 27,000 plus interest of 5% p.a. as from 13 October 2019, in accordance with the Coach’s request.

- Considered that, as regards the compensation agreed upon by the contractual parties, the clauses of the Contract were not reciprocal and proportionate in the sense of the relevant jurisprudence. He concluded that, in line with the jurisprudence of the Players’ Status Committee, the amount of compensation payable in this case should therefore be based on the residual value of the Contract.

- Found that between that date on which the Contract was terminated, i.e. 13 October 2019, until 31 May 2020, i.e. date on which the Contract was supposed to run, the Coach would have earned the total amount of USD 216,000.

- Assessed whether the Coach had signed an employment contract with another club during the relevant period of time, by means of which he would have been able to reduce his loss of income and, thus mitigate his damages.

- Observed that the Coach confirmed that he has remained unemployed since the date of termination of the Contract until the date on which the Appealed Decision was taken and decided that no mitigation was to be applied.

- Determined that the Club shall pay to the Coach the amount of USD 216,000 as compensation for breach of contract without just cause, with interest of 5% p.a. as from 13 October 2019 until the date of effective payment.

- Decided, in view of the fact that the claims of the Coach were almost “entirely accepted” and that the Club is the party at fault, that the Club should bear the costs of the proceedings in front of FIFA and determined those costs to the amount of CHF 25,000 to be paid by the Club in the following manner: CHF 5,000 directly to the Coach and CHF 20,000 to FIFA.

- Rejected any further claim of the parties.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

26. On 17 June 2020, in accordance with Article R47 of the Code of Sports-related Arbitration (the “Code”) (2019 edition), the Appellant filed its Statement of Appeal with the Court of Arbitration for Sport (“CAS”) against the Respondent with respect to the Appealed Decision. In its Statement of Appeal, the Appellant appointed Dr Jan Räker, Attorney-at-law in Stuttgart, Germany, as arbitrator.

27. On 22 June 2020, the CAS Court Office informed the Respondent of the initiation of the present appeals proceedings against him as well as of the possibility to start a mediation procedure under the CAS rules and invited the Appellant to file its Appeal Brief within the deadline stated in Article R51 of the Code. Separately, but still on the same day, the CAS Court Office informed the FIFA of its possibility to request its intervention to the present proceedings.

28. On 23 June 2020, the Respondent informed the CAS Court Office that he refused to submit

the present matter to a mediation procedure.

29. On 2 July 2020, the Respondent nominated Mr Manfred Nan, Attorney-at-Law in Arnhem, The Netherlands, as arbitrator.

30. On 29 July 2020, the CAS Court Office acknowledged receipt of the Appeal Brief filed on 8 July 2020 and of the Appellant’s payment of its share of the advance of costs for the present appeal procedure. Further, it informed the Parties that the Panel appointed to decide on the present proceedings was constituted as follows:

President: Mr Jacques Radoux, Référendaire, European Court of Justice, Luxembourg Arbitrators: Dr Jan Räker, Attorney-at-Law in Stuttgart, Germany Mr Manfred Nan, Attorney-at-Law in Arnhem, The Netherlands

31. On 28 August 2020, the CAS Court Office acknowledged receipt of the Answer, filed on 27 August 2020, and invited the Parties to state whether they would prefer a hearing to be held in the present matter.

32. On the same day, the Appellant informed the CAS of its preference for such a hearing.

33. On 2 September 2020, the Respondent informed the CAS Court Office that it preferred the Panel to render an award on the sole basis of the Parties’ written submissions.

34. On 3 September 2020, the CAS Court Office informed the Parties that the Panel had decided to hold a hearing in the present matter.

35. On 8 September 2020, the CAS Court Office sent to the Parties an Order of Procedure, requesting them to return a signed copy of it to the CAS Court Office. On the same day, the CAS Court Office acknowledged receipt of the copy of the Order of Procedure as signed by the Appellant. On 17 September 2020, the Respondent transmitted its signed copy of the Order of Procedure on which he had reiterated his reservations in relation to the “admissibility and competence” as he considered the Appealed Decision to be final and binding.

36. On 13 November 2020, a hearing took place in the present proceedings. Due to COVID-19 restrictions, the hearing was held via cisco-webex. The Panel was assisted by Mr Antonio De Quesada, Head of Arbitration at the CAS, who was physically present at the CAS Court Office in Lausanne, Switzerland. The Panel was joined by the following participants:

For the Appellant:

Mr Georgi Gradev and Mr Marton Kiss, counsels;

Mr Khaled Waleed Abdulqodus, Director of football in the Club, as a witness;

Mr Ahmad Mohammad Alnajjar, First Team Manager of the Club, as a witness;

Mr Sameh Samir Mostafa, interpreter.

For the Respondent:

Mr Juan Ignacio Martínez;

Mr Juan de Dios Crespo Pérez and Mr Alejandro Pascual Madrid, counsels;

Mr Alfonso Léon Lleó, interpreter.

37. At the outset of the hearing, the Parties confirmed that they had no objections to the constitution of the Panel.

38. The Panel heard Mr Khaled Waleed Abdulqodus and Mr Ahmad Mohammad Alnajjar, witnesses called by the Appellant. Both witnesses were invited by the President of the Panel to tell the truth subject to the sanction of perjury under Swiss law.

39. Mr Abdulqodus testified, inter alia: that on 4 October 2019 he was informed by the Coach that the latter would not come to the training that day as he had been instructed to not train the first team anymore; that when meeting with the Coach at the Club, the latter said that he could not join the training without having an official letter from the Club telling him that he was the coach of the first team; that it was difficult to get that letter as it was Friday; that when that letter finally arrived (around 18h30) the Coach, although the start of the training had been delayed to 18h30, still refused to lead the training and said that he would not lead the team anymore; that he was worried about his image, did not have a lot of experience and did not now what to do; that the Coach did not want to give the list of players for the match on 5 October 2019; that the Coach and his Coaches Team left the stadium after that; that the 4 October training was finally led by the goalie trainer; that the players on some pictures submitted by the Respondent were the U20 and U 17 team; that Mr Nestorovic led the team in the 5 October Match; that on 7, 8 and 9 October 2019 he did not see the Coach at the stadium but only some assistant coaches recording the training with their cell phones; that he was not aware of the Coach’s letter dated 7 October 2019; that he does not know how the disciplinary proceeding engaged by the Club works.

40. Mr Alnajjar testified, inter alia, that on 4 October 2019 Mr Abdulqodus arrived at the meeting room with the Coach and his Coaches Team; that the training session planned was delayed for 50 minutes; that after the meeting the training session was held without the Coach; that he was outside the pitch watching that training; that the Coach was not present and that he was told that the Coach had left the club/stadium; that the pictures submitted by the Respondent in relation to the training of 4 October 2019 shows the U17 team; that Mr Nestorovic had never been trainer of the Club’s first team before; that on 7, 8, 9 and 10 October 2019, he was present at the trainings sessions of the first team, in the stands, and saw some of the assistant coaches in the stands (7, 8 and 9) making recordings with their cell phones (on 8 and 9 October) but did not speak to them.

41. The Parties were given full opportunity to pose questions to the witnesses, to present their cases, to submit their arguments and to answer the questions posed by the Panel.

42. Before the conclusion of the hearing, the Panel invited the Parties to continue their negotiations to find a settlement agreement and granted them a deadline of two weeks to do so. At the conclusion of the hearing, the Parties confirmed that their right to be heard had been fully respected and that they had no objections as to the manner in which the proceedings had been conducted.

43. On 1 and 2 December 2020, the Parties informed the Panel that they had not been able to reach an agreement to settle the dispute. It was thus up to the Panel to decide the appeal.

IV. THE PARTIES’ SUBMISSIONS

44. The following summary of the Parties’ positions is illustrative and does not necessarily include each and every contention put forward by the Parties. The Panel, however, has carefully considered all the submissions made by the Parties, even if no explicit reference is made in what immediately follows.

45. The Appellant’s submissions may be summarized as follows:

• The jurisdiction of the Panel to decide upon the present matter is based on Article 58 of the FIFA Statutes and Article 23.4 of the 2020 FIFA Regulations on the Status and Transfer of Players (“RSTP”). In addition, the present appeal is admissible as it was initiated within the time limit provided under Article R51 of the Code.

• Concerning the Respondent’s reservations in relation to the “admissibility and competence” of the appeal, the Appellant points out that the Respondent did not submit any specific request for relief, allowing the Panel to render the appeal inadmissible. The Panel being bound to the limits of the Parties’ requests for relief, and prevented from stating ultra petita, it would have, in absence of a request for relief in that sense, no power to rule on the Respondent’s objection to the admissibility of the appeal. The Respondent’s reservations would thus be moot and without any legal effect.

• In any event, the Respondent’s objection should fail as the three conditions set out by the CAS jurisprudence for the CAS to have jurisdiction, i.e. (i) the parties must have agreed to CAS jurisdiction, (ii) there must be a decision of a federation, association or another sports-related body, and (iii) the internal remedies available to the appellant must have been exhausted before an appeal to CAS, are all met in the present case. Disputes related to the compliance with the prerequisites to request the grounds of a FIFA decision would concern the admissibility of the appeal and not the jurisdiction of the CAS. In the present case, nothing in Article 15.4 of the FIFA Procedural rules would suggest that the Appellant had to pay the relevant procedural costs directly to the Respondent instead of to the FIFA. Although the Respondent objected, on 13 April 2020, to the production of the grounds of the Appealed Decision because “the requirements to request the grounds […] have not been fulfilled and therefore the [Appealed Decision]

shall be final”, he did not challenge FIFA’s decision to proceed with the notification of those grounds, on which he was informed by letter dated 6 April 2020. Further, as the objection is directed against the FIFA, the Appellant has no standing to be sued because it has no role in issuing the grounds of the Appealed Decision. FIFA not being a party to the present appeal, the issue of the notification of the grounds would fall outside the scope of this procedure.

• As to the applicable law, the Appellant considers that pursuant to Article R58 of the Code in conjunction with Article 57.2 of the 2019 FIFA Statutes, the Panel should apply Swiss law to the merits of the case at hand, in particular the Swiss Code of Obligations (CO), general principles of law, and the well-established CAS jurisprudence.

• As to the merits, the Appellant submits that, according to established CAS case-law (CAS 2015/A/4039 and CAS 2018/A/5607 & 5608), the question of whether the Respondent had a just cause to terminate the Contract should be established strictly based on the grounds invoked by the Respondent in the termination letter dated 13 October 2019. It is clear from that letter that the Respondent relied exclusively on his “non-reinstatement in his position” as the sole reason to terminate the Contract and he may not rely on other circumstances which he was aware of at the time of the termination but did not invoke in the termination letter. Thus, the mutual termination proposed by the Appellant on 28 September 2019, the Respondent’s relocation to the U13 team on 3 October and the deduction of a day’s salary from the Respondent’s monthly salary for his unjustified absence from work on 4 October 2019 are moot and should not be heard by the Panel, contrary to what the Single Judge did.

• Further, according to the well-established CAS jurisprudence, a contract may be terminated prematurely by either party only when there are objective criteria that do not reasonably permit one to expect the continuation of the employment relationship. A premature termination of an employment contract can only be an ultima ratio, and the parties to an agreement have to try their best to maintain their contractual relationship. Indeed, when there is a misunderstanding or a conflict between a club and a coach, it is essential first to exhaust all the possibilities through negotiation to find a common understanding. In the present matter, as of the moment the Appellant temporarily suspended the Respondent from his position on 10 October 2019, the Respondent waited only three days before terminating the Contract although he could have taken a more lenient measure to ensure the performance of the Contract by the Appellant and wait, for example, for the internal disciplinary proceeding to end on 20 October 2019. Conversely, by temporarily suspending the Respondent between 10 and 20 October 2019 and conducting an internal disciplinary proceeding, the Appellant applied a more lenient measure to ensure the continuation of the contractual relationship. Even taking into account the timeframe between 3 and 13 October 2019, during which the Respondent refused in writing to lead the team in an official local match on 5 October 2019, such a short suspension from work, regardless of the reasons, cannot be viewed as a just cause for the Respondent to terminate the Contract in accordance with the CAS jurisprudence. Thus, since the Respondent’s termination

was not an ultima ratio measure, it was unjustified.

• Regarding the non-reinstatement in his position alleged by the Respondent, the Appellant submits that although it instructed, on 3 October 2019, the Respondent to supervise the training of the U13 team in addition to his original work, exercising a contractual right under Article 3 of the Contract, the Appellant cancelled its order on 4 October 2019 and immediately reinstated the Respondent with the first team. Thus, even if there was a breach of Contract by the Appellant, quod non, it was remedied after just one day and without any adverse effects on the Respondent’s career or reputation. However, according to the Appellant, it is established that after having been reinstated on 4 October 2019, the Coach and his team arrived late at the stadium after the training had started. It would be incumbent on the Respondent to prove that he was informed of his reinstatement late. At the hearing, the Appellant argued that the Respondent, as stated by the witnesses heard during the hearing, could have led the training on 4 October 2019, but refused to do so and left the stadium. Further, the Respondent, in clear violation of Article 22 of the Contract, refused to lead the first team in an official match on 5 October 2019. Thus, the Respondent cannot hold the Appellant liable for not reinstating him on 5 October 2019. On 6 October 2019, the first team had a day off after the official match played on the previous day, which would be a common practice and, hence, the Respondent could not legitimately expect to be reinstated on that day, either. As for the training on 7 October 2019, the Appellant argues that the Respondent failed to discharge his burden to prove that he has personally offered his services to the Appellant on that day before the training session. The pictures and videos adduced by the Respondent would not prove that he was personally present at the stadium and ready to lead the training. Further, that would be no evidence that anyone had stopped the Respondent from entering the stadium. The Respondent’s argument that he was stopped “at the gate” on the following days and that he therefore waited on the parking lot while his assistant coaches would take pictures of the training sessions led by another coaches team, would not be established by any evidence and would be, on top inadmissible, as raised for the first time at the hearing. There would further be no evidence that the Respondent offered his services to the club on 8 and 9 October 2019, and, thus, one would have to conclude that on those days the Respondent did not show up at the training of the first team again and induced his coaches team into an unlawful conduct. The fact that the Respondent allegations are not true could be deducted from the fact that numerous pictures submitted by the Respondent to prove that the training of the first team was led by another coaches team, would show, as testified by the witnesses, the U20 and/or U17 team.

• The Appellant recalls that the opening of the disciplinary proceedings against the Respondent by letter of 10 October 2019 was justified by the latter’s (i) failure to comply with his duty of obedience and having shown insubordination, (ii) failure to take the training of the first team on 4 October 2019 and (iii) failure to lead the official match on 5 October 2019.

• The Appellant points out that he endorsed the U17 coaches, M. Darko Nestorovic and M. Trkulja, to train the first team as from 29 October and thus after the

Respondent and the coaches team departed on 13 October 2019.

• Given that the Respondent did not have a just cause to terminate the Contract on 13 October 2019 unilaterally, he is, except for the September 2019 salary, i.e. USD 27,0000 which is due, not entitled to any compensation.

• In case the Panel would conclude that the Respondent terminated the Contract with a just cause, the Appellant submits that the Contract does not contain a liquidated damages clause and that according to Swiss law, in particular Article 337c (2) CO, an employee must act in good faith after the breach of the contract by the employer and seek another employment, showing diligence and seriousness. This principle aims at limiting the damages deriving from a breach and at avoiding that a possible breach committed by the employer could turn into an unjust enrichment for the employee. However, in the present case, the Respondent did not adduce any information or evidence whatsoever proving his bona fide efforts in securing a new employment after the termination of the Contract on 13 October 2019. He did not even state that he made any effort at all in good faith to mitigate his alleged damages. Regarding the elements of proof that the Respondent submitted after having been invited to do so in the Appeal Brief, the Appellant argues that these documents are not sufficient to establish that the Respondent’s really searched for a new employment.

• Alternatively, out of the 7.5 months that the Contract was still supposed to run, 2,5 months can be considered adequate for finding a new employment. However, in the subsequent period from 1 January 2020 nothing impeded the Appellant from finding a new job as many championships have completed at the end of the 2019 year, and many clubs have been looking for new coaches in the new season 2020. Also, there were clubs in Eastern Europe that were looking to replace their coaches during the winter break. Thus, the Respondent’s unemployment, at least between 1 January and 31 May 2020, cannot be reproached to the Appellant, as it was the result of his conscious decision not to actively look for new employment. Accordingly, the final calculation of damages to be awarded to the Respondent should be 1/3 of USD 216,000, i.e. USD 72,000.

• More alternatively, the Appellant argues that, according to FIFA and CAS jurisprudence, the Panel should consider the behaviour of the Respondent as a factor to reduce or completely deny any liability for damages of the Appellant. Indeed, according to Article 44.1 CO, the judge may reduce or completely deny any liability for damages if the damaged party consented to the act causing the damage, or if circumstances for which he is responsible have caused or aggravated the damage or have otherwise adversely affected the position of the person liable. In the present case, the Respondent’s behaviour from 4 October 2019 onwards, aggravated the alleged damage and adversely affected the position of the Appellant. Therefore, the Panel should consider the Respondent’s contributory fault or negligence to completely deny or, at the least, significantly reduce any Appellant’s liability for damages towards the Respondent by at least 50%, i.e. to USD 108,000.

• As to the Respondent’s requests for relief, the Appellant points out that these requests contain some points which were either expressly rejected in the Appealed Decision or which were not even lodged before the FIFA and were, thus, not part of the procedure before the Single Judge. The requests for relief in relation to the first category would amount to a “counterclaim” and would, thus, be inadmissible. Accordingly, the Panel should reject these on basis of articles R49 and R55 of the Code. The new claims, for their part, would clearly be inadmissible as they fall outside of the scope of the present appeal.

• In its Appeal Brief, the Appellant therefore requested the Panel to: “Primary 1. Set aside and annul the decision issued on 27 February 2020 by the Single Judge of the FIFA Players’ Status Committee in case Ref. No. 19-02027, except para. III.2. Alternatively, only if item no. 1 above is rejected 2. Partially set aside and annul the decision issued on 27 February 2020 by the Single Judge of the FIFA Players’ Status Committee in case Ref. No. 19-02027 in the sense that the compensation for damages due by the Appellant to the Respondent is reduced at the discretion of the Panel. In any event 3. Order the Respondent to bear any costs incurred with the present procedure. 4. Order the Respondent to pay the Appellant a contribution towards its legal and other costs in an amount to be determined at the discretion of the Panel”.

46. The Respondent’s submissions may be summarized as follows:

• The law applicable to the merits is (i) the FIFA Statutes and Regulations; (ii) the FIFA jurisprudence; (iii) the Swiss law, both pursuant to Article 57 par. 2 of the FIFA Statutes and Article R58 of the CAS and the rules of law chosen by the Parties, and (iv) Swiss jurisprudence.

• According to Article 15 of the FIFA Rules Governing the Procedures of the Players Status Committee and the Dispute Resolution Chamber, the application of which has been expressly accepted by the Appellant, “[w]henever procedural costs are due, the grounds of a decision will only be notified, to the party requesting the grounds and upon payment of the relevant procedural costs. If the procedural costs are not paid within 20 days of notification of the findings, the request for the grounds shall be deemed to have been withdrawn. As a result, the decision will become final and binding and the relevant party will be deemed to have waived their right to file an appeal”. In the present case, the amount of CHF 5,000 awarded as costs to the Respondent by the Appealed Decision have not been paid to the Respondent but to the FIFA. Thus, the Appealed Decision shall be final and binding and this appeal shall be rejected.

• The Appellant prevented the Coach and his assistant coaches from leading the first team trainings, was not interested in the Coach’s services, signed a new coaching staff

and wanted to terminate the Contract. Indeed, the following violations committed by the Appellant would leave no room for doubt as (i) on 29 September 2019, the Club wanted to settle all employment contracts right away, insisting on reaching an agreement for termination and offering a written settlement agreement; (ii) after the Respondent’s refusal to sign the settlement agreement, the Club was suddenly complaining about the Respondent’s training plan without any justification, (iii) the Club expressly instructed the Coach Team “not to train with the first team anymore” and to “observe the U13 team”; (iv) the Club hired a new coaching staff; (v) the Club simulated a reinstatement but never allowed the Coaches Team to conduct any further training session from 4 October 2019 onwards, and (vi) the Club did not effectively react to the warnings and deadlines given by the Coaches Team and the requested reinstatement never occurred. Especially the instruction to “not train with the first team anymore” would be self-explanatory and contrary to the Contract. The reinstatement, on 4 October 2019, was a mere simulation and the sanction of one-day salary for having been absent from the training on the 4 October 2019 was part of a strategy to demote the Respondent as the Coaches Team was notified about the reinstatement (18.21PM) one hour after the training session already started (17.30PM). Moreover, the Coaches Team was actually present during such training. It was obvious that the Appellant did want to reinstate the Coach and that the latter was prevented from exercising his work in clear violation of the Contract. However, according to constant FIFA and CAS jurisprudence (CAS 2013/A/3091 & 3092 & 3093; CAS 2013/A/3398; CAS 2014/A/3643), preventing a coach from fulfilling his duties is a severe violation of the employment contract giving the coach a just cause to bring such contract to an end. Swiss law, subsidiarily applicable to the present dispute, would follow the same line of reasoning.

• The Respondent’s suspension from work and salary, was a result of his refusal to mutually terminate the Contract and shall, thus, be deemed as a strategic manoeuvre. However, according to constant FIFA jurisprudence, the suspension of a coach has been always considered a severe breach of contract. The decision to suspend a coach jeopardises the latter’s sporting career and shall, thus, be perfectly justified, only applied under very exceptional circumstances and, above all, the coach in question shall be accurately informed about the reasons for such suspension. However, none of this has been done in the case at hand. The CAS jurisprudence (in particular CAS 2013/A/3091 & 3092 & 3093, CAS 2013/A/3398, CAS 2014/A/3643) would be consistent in this respect. Thus, it would be clear that the suspension of the Respondent was illegal and constituted a clear breach of the Contract by the Appellant leading per se to a justified termination by the Respondent.

• The Club not only prevented the Coach from working but also suspended the payment of the salary of September 2019, which constitutes another violation of the Contract by the Club. In the absence of a contractual provision allowing the Appellant to suspend the salary of the Respondent, such suspension would be a severe breach of the contract and contrary to article 323a CO as interpreted by the Swiss Federal Tribunal (4A-608/2009). In the present case, the suspension of the September 2019 salary clearly surpassed the limit of “one-tenth of the salary due” foreseen in Swiss law and

obviously cannot be considered as “security for the employer’s claims arising from the employment relationship”, since the month of September 2019 was fully worked by the Coach and was completely independent from any potential compensation. In any event, even the Appellant confirmed in its Appeal Brief that the salary of September 2019 is due.

• As regards the Appellant’s argument that the termination of the Contract can be only based in what is stated in the termination letter dated 13 October 2019, the Respondent recalls that he sent a total of 9 warning letters putting the Club in default about all the violations committed. Therefore, relying on just one letter to declare that the offer for mutual termination, the demotion of the Coach or the deduction of the salary are irrelevant would be completely absurd. Further, the CAS cases referred to by the Appellant, i.e. CAS 2018/A/5607 & 5608 and CAS 2015/A/4039, would not coincide with the Appellant’s position and concern different scenarios as the one at hand.

• The Appealed Decision clearly addressed the question whether the termination by the Respondent was ultima ratio or not. The Club’s allegations in this respect are outrageous since it is clear from the evidence that the Coach sent a substantial amount of warning letters putting the Club in default and granting the Club with the option to put a remedy. However, the Club showed no reaction and the Coach had no other option but to terminate the Contract, since there were no more measures that he could take.

• The above, together with all the evidence submitted as well as the determinations made by the Appealed Decision show that the Coach did actually satisfy his burden of proof by establishing the existence of a just cause to terminate the Contract.

• Regarding the duty to mitigate the relevant damages, the Respondent maintains that a period of 7,5 months, i.e. from 13 October until 31 May 2020 – date of the supposed end of the Contract, is, per se, common in a scenario like the one at hand, where a coach is dismissed in the beginning of a season. In case CAS 2008/A/5572 & 5573, referred to by the Appellant, the CAS held that a period of unemployment of 6 months was normal as the coach was looking to clear his name. Furthermore, due to the COVID-19, all the leagues were suspended at the beginning of March 2020 due to virus, leaving the Coach only 4 months to find a new team after having terminated the Contract barely 1 month after the official matches had started. In any event, it would be clear from the evidence he submitted, that he started looking for new employment options through his agents, but with no success. The Respondent points out that, at the date of the hearing, he was still unemployed which would show that it is difficult for the Respondent to find a new team. It is clear that the Respondent has not orchestrated any strategy disfavouring the Club as he offered the Club to solve the matter amicably as shown in its letter dated 13 October 2020 and contacted again the Club a few days later trying to reach an agreement, but the Club refused. Thus, the Appellant’s arguments regarding (i) the termination letter, (ii) ultima ratio, (iii) the burden of proof and (iv) mitigation, shall be fully rejected.

• As regards the compensation to be paid by the Appellant, the Respondent, first, argues that the contractual provisions establishing beforehand the consequences of a premature termination of the Contract, i.e. Articles 15, 26, 27 and 28, are arbitrary and potestative. According to constant FIFA and CAS jurisprudence they have thus to be declared null and void (CAS 2016/A/4852, CAS 2016/A/4605, CAS 2014/A/3707). In any event, the Appellant expressly confirmed in its Appeal Brief that the “Contract does not contain liquidated damages clause” and the validity or invalidity of these contractual provisions shall thus be “irrelevant” in the sense that the Club did not argue their validity and considered them as non-existing.

• The amount of the compensation has to be determined with due consideration for objective criteria, specifying that in case the Coach has signed any 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, i.e. until 31 May 2020, shall be deducted from the residual value of the Contract. Consequently, the Appellant owes the Respondent all the outstanding salaries plus the residual value of the Contract. This is also in accordance with articles 337b and 339 (1) CO. Thus, the compensation amount to be received by the Respondent is USD 27,000 (Twenty Seven Thousand US Dollars) as outstanding salaries for September 2019 and USD 216,000 (Two Hundred Sixteen Thousand US Dollars) as compensation for the breach of the Contract committed by the Appellant.

• According to Article 7 of the Contract, all amounts stated in the Contract are “net” amounts. Thus, in application of constant CAS jurisprudence (CAS 2010/O/2237, CAS 2017/A/5164) and in line with the Swiss Federal Tribunal’s jurisprudence (4A_678/2015) any amounts granted by means of this procedure shall be declared as “net of any taxes” and if any further amount is requested by the Spanish authorities after receiving the compensation, such extra amount shall be as well covered by the Club.

• In application of the well-established principle of the specificity of sport and on basis of Article 337c (3) CO, pursuant to which the “court may order the employer to pay the employee an amount of compensation determined at the court’s discretion taking due account of all circumstances; however, compensation may not exceed the equivalent six months’ salary for the employee”, the Panel should take into account the aggravating circumstances characterizing the behaviour of the Club in order to increase the compensation and therefore grant an extra sum in favour of the Coach in the same amount to any kind of mitigation which may be finally applied, if any, to the compensation granted by the Appealed Decision. This would be in perfect line with the concept of “Additional Compensation” set out in Article 17 (1).ii of the FIFA RSTP as well as Article 337c (3) CO.

• The Club shall bear all legal fees incurred by the Coach in addition to the totality of the CAS administrative and procedural costs.

47. The Respondent therefore requested the Panel to decide as follows: “a. To reject the appeal filed by the Club;

b. Confirm the FIFA Decision in its entirety and:

i. Request the Club to provide the Coach with the pertinent tax certificates as per Article 7 of the Employment Contract;

ii. Declare that if any further amount is requested by the Spanish Tax Authorities after receiving the compensation, such extra amount directly originated from the receipt of the compensation in Spain, shall be as well borne by the Club;

iii. Pay additional net compensation in the same amount to any kind of mitigation which may be finally applied, if any, to the compensation granted by the FIFA Appealed Decision, as per article 17.1.ii of the FIFA RSTP, article 337c.3 of the SCO and/or specificity of sport, plus 5% interests starting from 13 October 2019 until its effective and entire payment;

c. To fix a sum of EUR 10,000 (ten thousand Euros) to be paid by the Club, in order to contribute to the payment of the Coach’s legal fees and costs[;]

d. To order the Club to assume the entirety of the CAS administration and procedural fees”.