Al Gharafa S.C., Paulo Cesar Wanchope Watson v. Al Gharafa S.C., Paulo Cesar Wanchope Watson

1. It is largely admitted by scholarly writings that the parties may choose to subject the contract to a system of rules which is not the municipal law of a State and that such choice is consistent with Article 187 LDIP. The application of the FIFA regulations, as the “rules of law” chosen by the parties, satisfies indeed the need of rationality, security and foreseeability in the identification of the rules governing the world of football. As emphasized by other CAS awards, in fact, sport is by its nature a phenomenon going beyond national borders. As a result, it is necessary that the rules governing football at international level find a uniform and coherent application worldwide, irrespective of the municipal system in which they apply, so that all members of the football family are subject to the same rules.

2. Uniformity of application requires uniformity of interpretation. In other words, if the desired uniformity is to be achieved, also the interpretation of the FIFA rules and regulations cannot be affected by the peculiarities of the domestic legal system in which they are called to apply. In this respect, the interpretation of the FIFA Regulations for the Status and Transfer of Players, which apply to the contract, is determined by Swiss law. Swiss law, in fact, applies to the rules adopted by a Swiss entity, such as FIFA.

3. The general principle of art. 8 CC, recognized in all legal systems, also applies in CAS proceedings. As a result, in CAS arbitration, any party wishing to prevail on a disputed issue must discharge its burden of proof, i.e. it must meet the onus to substantiate its allegations and to affirmatively prove the facts on which it relies with respect to that issue.

4. The party in breach of the contract without just cause is not entitled to raise any claim against the injured party, and is liable for compensation of the damages sustained by

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

the injured party. More exactly, the party in breach is liable to pay to the injured party the amounts already accrued at the time of the termination of the contract, as well as financial compensation.

5. In principle, under the FIFA rules, the injured party should be restored to the position in which the same party would have been if the contract had been properly fulfilled. As a result, the injured party should be entitled to claim payment of the entire amount it could have expected, and compensation for the damages it would have avoided, if the contract had been implemented up to its natural expiration. Nevertheless, pursuant to a general principle, under which the aggrieved party is under the obligation to mitigate the damages sustained, 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 another employment, or what he has intentionally failed to earn.

6. It is not for a party to claim, and a CAS panel to impose, the sports sanctions and disciplinary measures provided by the FIFA Regulations in the event the other party is found in breach of a contract. The prerogative to impose such sanctions lies entirely with FIFA, with whose powers the CAS panel cannot, at this stage, interfere.

On 11 July 2005 Paulo Cesar Wanchope Watson (the “Player” or “Mr Wanchope”), a Costa Rican professional football player, born on 31 July 1976, signed an employment contract (the “Contract”) with the Qatari football club Al-Gharafa Sports Club (the “Club” or “Al-Gharafa”) for a period starting on 1 August 2005 and ending on 30 June 2006.

According to the Contract, the Player was to receive the following remuneration: i. EUR 460,000 as sign-on fee, to be paid upon the signature of the Contract; and ii. EUR 500,000 as salary, to be paid in eleven instalments of EUR 40,000 per month for the first ten months (i.e. from August 2005 to May 2006 included) and EUR 100,000 for the last month (June 2006) of the Contract.

Under the Contract, in addition, the Player was to receive the following benefits: i. a “winning bonus”, in case of victory by the Club of specified competitions (Asian Champions League, Qatari League, Emir’s C Cup, Heir Apparent Cup); ii. a “decently furnished house … free of charge”; iii. “3 Business Class Tickets for the Player and his family”; and iv. a “Car for Player’s use in Qatar”.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

At the same time, the Contract provided for a payment of EUR 300,000 to Malaga S.A. (i.e., the former club of the Player) as a “transfer fee”.

On 23 January 2006 the Player contacted FIFA stating that he had not been paid the salaries of November and December 2005, and that, as from the second week of November 2005, he had not been allowed to take part in the training sessions of the Club. In addition, the Player submitted that by a document dated 23 November 2005 the Club had, in substance, terminated the Contract, leaving him with no other choice than seeking a new employment. The Player therefore indicated that on 12 January 2006 he had concluded a new contract with another club, i.e. with the Costa Rican Club Sport Herediano (“Herediano”).

In light of the foregoing, the Player requested FIFA that the Club be condemned to pay him, for breach of the Contract, the following amounts: i. EUR 80,000 as outstanding salaries for the months of November and December 2005, plus 5% interest rate; ii. EUR 300,000 as salaries the Player would have received under the Contract until its normal expiration, if the Club had not breached it; iii. QAR 224,000, corresponding to EUR 51,640.08, as refund of an advance payment made by the Player for his accommodation; iv. USD 21,557, as repayment of the flight tickets bought by the Player for him and his family; and v. EUR 4,590, as refund of the expenses borne by the Player to move to Qatar.

In addition, the Player requested compensation, in an amount corresponding to six months of salary, for the physical and psychological damages suffered as a consequence of the premature termination of the Contract, and the application of sporting sanctions on the Club for the breach of the Contract.

The Club, in its answer, maintained that the Contract had been breached by the Player, that had not complied with the disciplinary obligations arising thereunder and that had failed to return to Qatar after the Christmas leave.

In light of the foregoing, the Club requested FIFA: i. to impose on the Player the applicable sporting sanctions for the unilateral breach of the Contract; and ii. to condemn the Player to refund the Club the following amounts:

• EUR 460,000, that the Club had paid to the Player as a sign-on fee; and

• EUR 210,000, as pro rata of the amount that the Club had paid to the Player’s former club as a transfer fee.

On 23 March 2006 the Dispute Resolution Chamber of the FIFA Players’ Status Committee (the “DRC”) issued the following decision (the “Decision”):

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

“1. The claim of the player, Mr Paul Cesar Wanchope Watson, is partially accepted. 2. The Qatari club Al-Gharafa has to pay the amounts of EUR 155,000, QAR 242,870 and USD 16,472 to the player, Mr Paulo Cesar Wanchope Watson, within 30 days of notification of this decision. 3. If the aforementioned amounts are not paid within the aforementioned deadline, a 5% interest rate per annum will apply, and the present matter will be submitted to the FIFA’s Disciplinary Committee, so that the necessary disciplinary sanctions may be imposed. 4. The player, Mr Paulo Cesar Wanchope Watson, is directed to inform the club Al-Gharafa immediately of the account number to which the remittances are to be made, and to notify the Dispute Resolution Chamber of any payment received. 5. The counterclaim lodged by the Qatari club Al-Gharafa is rejected”.

In support of its decision, the DRC preliminarily remarked that the FIFA Regulations for the Status and Transfer of Players (edition 2005) (the “RSTP 2005”) were applicable to the substance of the dispute.

With respect to the substance of the matter, the DRC focussed its attention on the document dated 23 November 2005, and signed by the Club’s Secretary General, whereby it was stated that the Contract between the Club and the Player was terminated and that the Player was free to conclude an employment contract with a club of his choice. At the same time, the DRC took note of the fact that the Player “was never paid the salaries of November and December 2005 nor was he allowed to take part in the training sessions with the first team, as from the second week of November”. In particular the DRC noted that the Player “never signed the contractual termination and remained at the Club’s disposal until the end of December 2005, when he left Qatar on occasion of his Christmas leave”.

According to the DRC, the Player’s attitude “clearly shows his intention not to accept the early contractual termination”. The DRC found a confirmation of such conclusion in “the fact that the Costa Rican player lodged his claim with FIFA on 23 January 2006, prior to the Qatari club’s objection to the issuance of the player’s ITC”.

Taking the above into consideration, the DRC came to the conclusion that “the document dated 23 November 2005 has to be regarded as the unjustified unilateral termination of the employment contract perpetrated by the Qatari club”.

The DRC took further note of the Club’s position, whereby the Player would be responsible for having unilaterally breached the Contract, well as of the Club’s claim against the Player for having repeatedly breached the disciplinary rules provided by the Contract and of having failed to return to Qatar after the Christmas leave. In this respect, the DRC underscored that such “an allegation is not consistent with the document previously signed by the Qatari club on 23 November 2005 whereby, inter alia, the club ascertained that, throughout the duration of the employment contract, the Costa Rican player had always maintained an impeccable level of behaviour”.

The DRC, then, analysed the financial consequences to be drawn from the above conclusion.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

Firstly, it maintained that the Player was undoubtedly due the salaries of November and December 2005, corresponding to EUR 80,000, especially taking into account that he had remained at the Club’s disposal until the end of December 2005, when he left Qatar on occasion of his Christmas leave.

Secondly, and as regards the claimed compensation for contractual breach amounting to EUR 300,000 corresponding to the salaries the player would have received until the expiry of the contract on 30 June 2006, if the club had not committed unilateral breach, the Chamber observed that the Player found almost immediately employment with another club, at exceptionally less favourable financial conditions, i.e. at a monthly salary of USD 500. To this effect, the DRC emphasised that the Player apparently agreed to accept such a financial treatment and, consequently, could not claim any loss originating from the considerable difference in salary between the Contract stipulated with the Club and the one concluded with the Costa Rican club. The DRC added that, as a general rule, when concluding a new employment contract following the termination of an existing employment contract, the player has the obligation to mitigate any possible financial damage deriving from the conclusion of such a contract. According to the DRC, the Player was apparently well aware of the newly stipulated contractual conditions and of the subsequent drastic reduction in salary and, consequently, could not claim from the Club any disproportionate damage linked with such a financial loss. The DRC also took into consideration the fact that the total value of the Contract between the Player and the Club amounted to EUR 960,000, and that the Player, prior to his leave, had already received over half of the entire value of his Contract. In view of such considerations, the DRC decided to partially accept the Player’s request to be awarded compensation for breach of contract and concluded that the Club had to pay to the Player the amount of EUR 75,000.

Conversely, the DRC rejected the Player’s claim to be granted the amount corresponding to six months of salary in reparation of the physical and psychological damages suffered as a consequence of such a termination. In the DRC’s opinion, in fact, the amount granted as compensation “sufficiently repairs the damages suffered by the claimant”.

The DRC then considered the Player’s request to be refunded QAR 224,400 (EUR 51,640.08) as advance payment made by the Player for his accommodation, as well as the unpaid business class tickets for the Player and his family, i.e. QAR 18,470, plus USD 16,472, and concluded, “following a thorough perusal of the payment receipts supplied by the Player”, that the Club had to reimburse the Player of such amounts.

On the other hand, with respect to the Player’s request to be reimbursed EUR 4,590 corresponding to the expenses borne for his move from Spain to Qatar, the DRC noted that the refund of such expenses was not stipulated in the Contract and, therefore, rejected the request.

At the same time, consistently with the conclusion that the Club was responsible of an unjustified breach of the Contract, the DRC decided to reject the Club’s request to condemn the Player to pay compensation for contractual breach.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

The Decision was notified to the Player and to the Qatar Football Association on 15 June 2006.

On 5 July 2006, the Club filed a statement of appeal with the Court of Arbitration for Sport (the “CAS”), pursuant to the Code of Sports-related Arbitration (the “Code”), to challenge the Decision.

On 6 July 2006, the Player also filed a statement of appeal with the CAS, pursuant to the Code, to challenge the Decision.

LAW

Jurisdiction

1. CAS has jurisdiction to decide the present dispute between the parties. The jurisdiction of CAS, which is not disputed by either party, is based in casu on Article R47 of the Code, on Articles 59 ff. of the FIFA Statutes and on Article 24.2 of the RSTP 2005.

Appeal proceedings

2. As these proceedings involve appeals against a decision in a dispute relating to a contract, issued by a federation (FIFA), whose statutes provide for an appeal to the CAS, they are considered and treated as appeal arbitration proceedings in a non-disciplinary case, in the meaning and for the purposes of the Code.

Admissibility

3. The parties’ respective statements of appeal were filed within the deadline set down in the FIFA Statutes and the Decision. No further recourse against the Decision is available within the structure of FIFA. Accordingly, the appeals brought by the Club and by the Player are admissible.

Scope of Panel’s review

4. According to Article R57 of the Code, the Panel has full power to review the facts and the law of the case. Furthermore, the Panel may issue a new decision which replaces the decision challenged or may annul the decision and refer the case back to the previous instance.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

Applicable law

5. According to Article R58 of the Code, the Panel is required to decide the dispute “according to the applicable regulations and 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, the application of which the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

6. The Panel has remarked that, while the Club is basing its requests for relief on Qatari law, the Player has invoked the application of Swiss law. Both parties, indeed, agree on application of the relevant FIFA rules and regulations.

7. Indeed, pursuant to Article 59.2 of the FIFA Statutes: “… CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss Law”.

8. At the same time, the Contract at issue contains the following provisions: Article I [“Employment Basis”]: “1. […] 2. The following elements form an integral part of this contract: a) Statutes and Regulations of the Club b) Statutes and Regulations of the Qatar Football Association (QFA) c) Statutes and Regulations of AFC and FIFA (including the Laws of Game). 3. The Player acknowledges the aforementioned statutes and regulations as strictly binding on him, in so far as they are consistent with legal provisions and public order. 4. The Player acknowledges the disciplinary authority of the Club and submits to the decisions of the organs for the administration of justice of the aforementioned football authorities (QFA, AFC and FIFA), provided they have jurisdiction”;

Article XII [“Final Provisions”]: “3. Apart from the FIFA, AFC and QFA Regulations governing this matter, in case of any contractual dispute the applicable law shall be the Law of the State of Qatar”.

9. In this case, therefore, the FIFA rules and regulations are to be applied primarily. More precisely, the Panel finds that the Contract, executed on 11 July 2005, is governed, as to its substance, by the RSTP 2005. In fact, pursuant to their Article 29.2, the RSTP 2005 entered into force on 1 July 2005; in any case, they are applicable, pursuant to their Article 26.2, to any dispute submitted to FIFA after their entry into force. As the DRC correctly remarked, therefore, the RSTP 2005 applied to the claim submitted to FIFA by the Player to FIFA on 23 January 2006, and are

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

applicable before this Panel.

10. The application of the FIFA rules and regulations has indeed been agreed upon by the parties, in Articles I and XII of the Contract, and such agreement has to be respected by this Panel. The current arbitration proceedings, in fact, are governed by Chapter 12 of the Swiss Federal Code on Private International Law (the “LDIP”), whose Article 187 so provides: “1 Le tribunal arbitral statue selon les règles de droit choisies par les parties ou, à défaut de choix, selon les règles de droit avec lesquelles la cause présente les liens les plus étroits. Les parties peuvent autoriser le tribunal à statuer en équité”. [Translation: “1 The Arbitral Tribunal shall rule according to the law chosen by the parties or, in the absence of such choice, according to the law with which the action is most closely connected. 2 The parties may authorise the arbitral Tribunal to rule according to equity].

11. As a result, the RSTP 2005 has to be applied as the “law” chosen by the parties. It is in fact largely admitted by scholarly writings that the parties may chose to subject the contract to a system of rules which is not the municipal law of a State and that such choice is consistent with Article 187 LDIP (see LALIVE/POUDRET/RAYMOND, Le droit de l’arbitrage interne et international en Suisse, Lausanne 1989, p. 392 ff.; DUTOIT B., Droit international privé suisse, Bâle 2005, p. 657). In addition, it is to be noted that Article R58 of the Code specifically binds the Panel to apply the “regulations and the rules of law” chosen by the parties.

12. The application of the FIFA regulations, as the “rules of law” chosen by the parties, satisfies indeed the need of rationality, security and foreseeability in the identification of the rules governing the world of football. As emphasized by other CAS awards (CAS 2005/A/983 & 984, at § 68), in fact, sport is by its nature a phenomenon going beyond national borders. As a result, it is necessary that the rules governing football at international level find a uniform and coherent application worldwide, irrespective of the municipal system in which they apply, so that all members of the football family are subject to the same rules.

13. Uniformity of application requires uniformity of interpretation. In other words, the Panel notes that, if the desired uniformity is to be achieved, also the interpretation of the FIFA rules and regulations cannot be affected by the peculiarities of the domestic legal system in which they are called to apply.

14. In this respect, the Panel finds that the interpretation of the RTSP 2005, which apply to the Contract, is determined by Swiss law. Swiss law, in fact, applies to the rules adopted by a Swiss entity, such as FIFA; Swiss law is indicated to be applicable to FIFA regulations by Article 59.2 of the FIFA Statutes.

15. At the same time, the Panel remarks that the parties have indicated, at Article XII.3 of the Contract, that “apart” from sporting regulations, the Contract is subject to Qatari law.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

16. On the basis of such reference, the Panel finds that Qatari law is applicable to the Contract the extent the FIFA rules and regulations (as interpreted in accordance with Swiss law) do not provide otherwise. Indeed, the primary application of the FIFA rules and regulations has been agreed by the parties (at Article I of the Contract), and the reference to Qatari law is only subsidiary, since Qatari law is made applicable “apart” from sporting regulations.

17. On the basis of the foregoing, therefore, the Panel concludes that FIFA rules and regulations, and chiefly the RSTP 2005, as interpreted in accordance with Swiss law, fall to be applied primarily. Qatari law, then, applies only subsidiarily.

Scope of Panel’s review

18. Pursuant to Article R57 of the Code, “The Panel shall have full power to review the facts and the law. It may issue a new decision which replaces the decision challenged or annul the decision and refer the case back to the previous instance. […]”.

The dispute between the parties

19. The question to be determined by the Panel in these arbitration proceedings concerns the performance of the Contract by the parties. The DRC, in fact, in the Decision held that the Contract has been breached by the Club, that was deemed to have unilaterally terminated it without just cause. The Club challenges this conclusion and submits that the Contract has been breached by the Player, who should therefore be held liable to pay compensation to the Club. On the other hand, the Player submits that the DRC was right in holding the Club in breach of the Contract, but challenges the Decision to the extent it did not award the entire compensation the Player was seeking before the DRC.

20. In the evaluation of the foregoing, the Panel finds itself to be bound to apply the general rules on the burden of evidence in order to determine which party should bear the consequences of the failure to prove its allegations.

21. In fact, pursuant to Article 8 of the Swiss Civil Code, corresponding to a general principle, recognized in all legal systems, “Chaque partie doit, si la loi ne prescrit le contraire, prouver les faits qu’elle allègue pour en déduire son droit”. [Translation: “Unless the law provides otherwise, each party shall prove the facts upon which it relies to claim its right”].

22. Such principle applies also in CAS proceedings (see for instance CAS 96/159 & 96/166, published in Digest of CAS Awards II 1998-2000, The Hague 2002, pp. 434 ff.). As a result, in CAS arbitration, any party wishing to prevail on a disputed issue must discharge its “burden of

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

proof”, i.e. it must meet the onus to substantiate its allegations and to affirmatively prove the facts on which it relies with respect to that issue.

23. The Contract, indeed, provides for obligations binding on the Player and on the Club.

24. The “Player’s Obligations” are defined by Article II of the Contract as follows: “1 The Player pledges to apply all his energy and sporting ability without restraint for the benefit of the Club, to do his utmost to maintain and enhance the Club, and to refrain from doing anything which could generally be detrimental to the Club, in particular, before and during events in which the Club participates. 2 In accordance with these principles, the Player is subject to the following specific obligations: a) To participate in all Club games and practice, in training, whether generally provided for or specially arranged, in all player conferences and any other arrangements for the purpose of preparing for games and competition. This shall also apply if his participation as player or substitute player is not envisaged. b) In case of professional injury or illness in the course of his activities as a licensed player, to immediately report to the doctor appointed by the Club. To inform the board or the relevant person appointed by the Club of the doctor’s diagnosis insofar as it concerns the Player’s obligations towards the Club. Should the Player’s playing capacity be impeded for more than three days, or if he is deemed unfit to play at all, he must present a medical certificate. c) To comprehensively undergo the athletic and therapeutic measures ordered by the person duly authorised by the Club, taking into consideration the Player’s individual rights. d) To participate in trips at home and abroad, using the mode of transport arranged by the Club if necessary. e) To take good care – for the duration of his contract – of all standard garments and equipment provided by the Club, and to return such items to the Club on the termination of the contractual relationship. f) To conduct himself in public and in private in such a way as to not harm the image of the Club, the Qatar Football Association and football in general, and to refrain from commenting to third parties on internal Club-related matters; similarly, the Club acknowledges the right of the player to free expression, provided it discredits neither the Club nor the game of football. g) To prepare conscientiously for all of the Club’s sporting events, including, notably, heeding the coach’s advice regarding lifestyle, in so far as it affects the Player’s performance.

h) To behave in a sporting manner towards anyone involved in a match or training session, and, in particular, to accept the decisions taken by a referee or assistant referees during a match without protest. i) To make himself available for community, public relations and mass media involvement as requested by the Club management, at reasonable times during the period of the contract (e.g. 2/3 hours per week)”.

25. The “Club’s Obligations” are defined by Article IV of the Contract as follows: “1 The remuneration of the Player shall be set out in the Schedule attached to this Contract and signed by the parties. The Schedule shall include all remuneration to which the Player is or may be entitled.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

2 During the contractual period, the Club will make the following elements available to the Player: a) Qualified personnel for proper playing and training operations; b) Proper playing and training places, as well as other infrastructure, as per the Qatar Football Association’s guidelines; c) Sports-orientated medical and therapeutic care; d) Sportswear; e) Training programme, pending sudden changes. 3 The Club pledges not to discriminate against the Player. 4 The Club pledges to release the Player as per FIFA’s Regulations if called up for national-team duty”.

26. In light of the foregoing, the basic obligation of the Player is to participate in the sporting activity and the social events of the Club; while the main obligation of the Club is to pay the agreed upon salary. It is to be noted, however, that the participation in the sporting activities, and chiefly in training sessions, in addition to being an obligation of the Player, is also a right of the same.

27. On the basis of the parties’ submissions, the Panel remarks that it is undisputed that the Player did not receive the salary for the month of November 2005 (as well as the salaries for the following months), and that the Player, starting from the first days of November 2005, no longer participated in the sporting activity and/or attended the social events of the Club.

28. This factual situation finds contradictory explanations by the parties: the Club explains that the Player was not paid because he was in breach of the Contract, or, at least, because an agreement as to the termination of the Contract was reached; on the other hand, the Player submits that he did not participate in the training sessions because the Club excluded him from such sessions, that the Club failed to comply with other obligations arising under the Contract and that no agreement as to the termination of the Contract was reached.

29. In order to resolve the dispute between the parties, the Panel has first to verify whether an agreement between the parties was reached for the termination of the Contract: should this be the conclusion, there would be no need for the Panel to resolve on the parties’ submissions as to the breach of the Contract. In this respect the Club has indicated that a meeting between the parties took place on 21 November 2006, at the end of which the parties agreed on the termination of the Contract, to be confirmed by a document to be signed (but actually not signed) by the parties. In the Club’s opinion, a letter dated 22 November 2005 from the Player to the Club confirms that an agreement between the parties was actually reached, notwithstanding the fact that the document terminating the Contract had not been signed.

30. The Panel finds the submissions of the Club as lacking the necessary supporting evidence. It was indeed the burden of the Club to prove that the settlement was reached, since the Club is invoking it in order to have the Decision set aside. And the Panel finds that the Club did not meet that burden. In this respect, in fact, the Panel notes that:

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

i. the “mutual agreement” (whose text has been filed by the Club as Exhibit 22 to its appeal brief), whereby the Contract was terminated, has not been signed by the parties; ii. it is actually a principle common to several jurisdictions, and well known also in Swiss law (Art. 341 CO), that waivers of rights by an employee, pending the employment relationship, cannot be lightly conceded, if not proved beyond any reasonable doubt. Indeed, some legal systems even consider such surrender of rights not to be valid (see WYLER R., Droit de travail, Berne 2002, p. 445, confirming that Art. 341 CO prohibits the waiver by the employee of his right to be paid his basic salary for the activities already performed). As a result, the Club had to meet a high standard of evidence to prove that an agreement, not contained in a written document, whereby the Player/employee waived his rights under the Contract, was reached; and iii. the letter dated 22 November 2005 from the Player to the Club is open for ambivalent interpretation, since its mention of “the agreement made” could be intended to refer to the issue concerning the settlement of costs of accommodation.

31. In light of such conclusion (i.e., that no evidence is given that the Contract was terminated by mutual agreement), the Panel has therefore to determine whether and by which party the Contract was breached.

32. In this respect, the Panel notes that the Player starting from early November 2005 no longer participated in the Club’s activity. The Panel remarks that this failure would in principle amount to a breach by the Player, and that the Player had the burden to prove that his failure to attend the Club’s activity was somehow justified by the Club’s attitude and breach of the Contract. In such regard, the Panel underlines, on the basis of the parties’ submissions and filings, that the Club did not react to the alleged failure by the Player: on the contrary, it appears that the Club came to the resolution to have the relationship with the Player terminated by mutual agreement, and not because of the Player’s fault. In other words, the Panel finds that the Club, if it did not cause the Player to miss the training sessions, certainly accepted such situation. In fact, if no evidence has been adduced by the Player to prove that the Club denied him the opportunity to train and that he insisted for training, no evidence has also been brought by the Club confirming that it had requested the Player to comply with the Contract. On the contrary, it is to be noted that on 23 November 2005 the Club signed a declaration (filed by the Club as Exhibit 24 of its appeal brief) confirming that the Player “extended his service to this club to a high level of his career. He behaves well and he is having good experience in the field of football game”. The explanation given by the Club for this document (i.e., that it was signed only to help the Player find a new employment), however suggestive, is not supported by any evidence.

33. On the other hand, even though it appears from the file that the performance of the Contract by the Player was somehow suspended, pending the discussions on the termination, the file does not show that the Player renounced his right to be paid his salary. The same letter dated 22 November 2005 from the Player to the Club, in fact, confirms the expectation of the Player that (at least) the salary of November 2005 be paid. By failing to pay such salary, the Club breached the Contract.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

34. In the same way, the Panel finds that the Contract was breached by the Club also as a result of its repudiation, as contained in the declaration contained in the letter dated 23 November 2005 (filed by the Club as Exhibit 24 to its appeal brief), indicating that “the contract … herewith is terminated”.

35. Contrary to such conclusion, no justification, supported by convincing evidence, has been brought by the Club. The Panel notes, in fact, that the failure of the Club to pay the salary of November 2005 or the declaration that the Contract was terminated, cannot be justified on the basis of an alleged agreement on the termination of the Contract, evidence of which was not provided, or by reference to a breach by the Player, that did not participate in the Club’ activities, since the Club appears to have accepted such situation.

36. As the party in breach of the Contract without just cause, the Club is therefore not entitled to raise any claim against the Player, and is liable for compensation of the damages sustained by the Player. More exactly, the Club is liable to pay to the Player the amounts already accrued at the time of the termination of the Contract, as well as financial compensation. In fact, pursuant to Article 17 [“Consequences of Terminating a Contract Without Just Cause”] of the RSTP 2005 “… if a contract is terminated without just cause … the party in breach shall pay compensation”.

37. With respect to the accrued remuneration, the Panel finds that the Player is entitled to the salaries, in the total amount of EUR 80,000, for the months of November and December 2005, i.e. for the entire period he remained in Qatar, at the Club’s disposal, until he left Doha on 23 December 2005. In accordance with the Player’s request, the abovementioned amount has to be increased by interest at the rate of 5% per annum since the due date until actual payment. The measure of interest rate for late payments, as provided by Swiss law (Article 104.1 of the Swiss CO), has not been challenged by the Club, that has not invoked any provision of Qatari law in this respect.

38. With respect to the financial compensation Article 17 of the RSTP 2005 so provides: “… compensation for 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 expense paid or incurred by the Former Club (amortised over the term of the contract) and whether the contractual breach falls within a Protected Period”.

39. In accordance with CAS practice, the Panel notes that in principle, under the FIFA rules, the injured party should be restored to the position in which the same party would have been if the contract had been properly fulfilled. As a result, the Player should be entitled to claim payment of the entire amount he could have expected, and compensation for the damages he would have avoided, if the Contract had been implemented up to its natural expiration. Nevertheless, pursuant to a general principle, under which the aggrieved party is under the obligation to mitigate the damages sustained, the employee must permit a set-off against this amount for what

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

he saved because of the termination of the employment relationship, or what he earned from another employment, or what he has intentionally failed to earn.

40. This conclusion is consistent with the provisions of Swiss law (which governs the FIFA rules) and of Qatari law, applicable to the Contract “apart” from sporting regulations.

41. With respect to Swiss law, the Panel notes that pursuant to Article 337c para. 2 CO: “1 Lorsque l’employeur résilie immédiatement le contrat sans justes motifs, le travailleur a droit à ce qu’il aurait gagné, si les rapports de travail avaient pris fin à l’échéance du délai de congé ou à la cassation du contrat conclu pour une durée déterminée. On impute sur ce montant ce que le travailleur a épargné par suite de la cessation du contrat de travail ainsi que le revenu qu’il a tiré d’un autre travail ou le revenu auquel il a intentionnellement renoncé”. [Translation: “1 If the employer dismisses the employee without notice in the absence of a valid reason, the latter shall have a claim for compensation of what he would have earned if the employment relationship had been terminated by observing the notice period or until the expiration of the fixed agreement period. 2 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 another work, or what he has intentionally failed to earn”].

42. With respect to Qatari law, the Panel notes that pursuant to Article 64 of the Labour Law No. 14 of 2004: “… If the court decides that the dismissal is arbitrary or in violation of the provisions of this law, it shall either annul the dismissal, orders the return the worker to his work and payment of his wages for the period he was not allowed to work in implementation of such penalty or payment of a suitable compensation. Such compensation shall include the wages and other benefits denied to him as a result of such dismissal” [Text provided by the Club at the hearing].

43. In this respect the Panel has taken note of the declarations of the Player, whereby it was confirmed that under the contract the Player signed with Herediano after the termination of the Contract he earned a salary of USD 500 per month. The Panel however does not find that the entire difference between the salaries under the Contract and the salaries under the contract with Herediano is to be paid to the Player. The amount the Player is earning out of the new contract, in fact, is very low with respect to the salary the Player was earning on the basis of the Contract, and to the “value” of the Player himself, an international footballer playing for the Costa Rican national team. As a result, the Panel agrees with the conclusion reached by the DRC in the Decision, i.e. that the drastic reduction in the salary was (also) a choice of the Player, who preferred to play for Herediano, in Costa Rica, i.e. decided to earn much less than he could have earned, in order to have the opportunity to better prepare, in his home country, for the upcoming World Cup, and that the financial effects of such choice should not be borne by the Club.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

44. In light of the foregoing, the Panel finds that the DRC, when it set the amount of the compensation to be paid to the Player in the amount of USD 75,000, did not improperly exercise its power of evaluation, with which, therefore, the Panel does not want to interfere. In any case, the Panel confirms that such amount provides for adequate compensation to the Player, taking into account the factors indicated by Article 21 of the RSTP 2005.

45. On the other hand, on the basis of the RSTP 2005, as interpreted in accordance with Swiss law and supplemented by Qatari law, the Panel finds that the Player is not entitled to any supplementary compensation: the Player, indeed, has not given evidence of the existence nor of the range of any damages he may have suffered, in addition to the loss of the profits under the Contract because of the breach by the Club.

46. The Player, in addition to compensation, is also requesting in this arbitration the refund of the amounts he paid as accommodation and flight tickets, and he invokes in this regard the provisions of the Contract (§ 6 above).

47. With respect to the costs of accommodation, the Player is asking for a refund totalling QAR 224,400, already granted by the Decision, and has filed several documents as evidence of his claim regarding this matter. The evidence filed is the following: i. the invoice No. 205, dated 1 September 2005, relating to the quarterly rent from 1 September 2005 to 30 November 2005 (Exhibit 8 to the appeal brief filed by the Player); ii. the invoice No. 206, dated 1 December 2005, relating to the quarterly rent from 1 December 2005 to 28 February 2006 (Exhibit 9 to the appeal brief filed by the Player); iii. the invoice No. 207, dated 1 March 2006, relating to the quarterly rent from 1 March 2006 to 31 May 2006 (Exhibit 10 to the appeal brief filed by the Player); iv. the invoice No. 208, dated 1 June 2006, relating to the quarterly rent from 1 June 2006 to 31 August 2006 (Exhibit 11 to the appeal brief filed by the Player); v. the “receipt voucher” issued by the real estate agency, dated 18 September 2005, covering the abovementioned invoices and the “prepaid rent for 18 months from 01/09/2006 to 28/02/2008”, in the total amount of QAR 336,600 (Exhibit 7 to the appeal brief filed by the Player).

48. The Player is basing his claim on the Club’s contractual obligation to provide him with a “decently furnished house … free of charge” (§ 6 above). On the other hand, the Club denies this request and submits that no refund should be granted, because the Player, that had refused to accept the accommodation proposed by the Club, “decided to bear any and all the costs for his accommodation”.

49. With respect of the above, the Panel notes that it is undisputed that the Club offered an accommodation to the Player and that the Player, notwithstanding such offer, decided to find an accommodation elsewhere. The Panel, in addition, remarks that the Player has not submitted any evidence in order to prove that the Club had failed to offer him a “decently furnished house”.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

At the same time, the Panel observes, there is no evidence that the Player, by opting for an accommodation other than that offered by the Club, has waived his right to enjoy a contractual benefit. The letter dated 22 November 2005 (filed by the Club as Exhibit 19 to its appeal brief), whereby the Player instructed the Club to deduct an amount from his salary in order to settle the rent for the accommodation, gives no univocal evidence.

50. In light of the foregoing, the Panel finds that the Player is entitled to compensation for the rent paid for his accommodation in Qatar.

51. The Panel, indeed, considers that in principle the amount to be reimbursed to the Player should correspond to the lower amount of the rent paid by the Player for the accommodation of his choice or of the cost for the villa offered by the Club: failing a specific agreement on the point, if the Player has decided to find accommodation elsewhere at a higher price, refusing a “decently furnished house”, the Club should not be held to bear entire price, the extra cost remaining with the Player. The burden to prove that the price that the Club would have paid if the Player had accepted the Club’s offer was lower than the rent paid by the Player for the accommodation of his own choice rested with the Club. Since the Club has failed to provide any document in this respect, the Panel is bound to refer, for the determination of the amount to be reimbursed, only to the entire rent actually paid by the Player.

52. In this respect, however, the Panel finds that the Player can be compensated only for the months he actually remained in Qatar, i.e. until the end of December 2005. The Player, in fact, has failed to submit any document (including a copy of the rent contract) justifying a payment until the end of August 2006 (for the period following his departure from Doha) or to give explanations with respect to the invoices and the “receipt voucher” it filed, containing contradictory elements (e.g., with respect to the dates of issue and the amounts actually paid to the real estate agency).

53. In summary, the Panel finds that the Player is to be reimbursed only for the amount indicated in the invoice No. 205 (for QAR 56,100), corresponding to the rent from 1 September 2005 to 30 November 2005, and for one third (equal to QAR 18,700) of the amount indicated in the invoice No. 206, corresponding to the rent for the month of December 2005, for a total, therefore, of QAR 74,800. The Decision, which held otherwise, is to be partially modified in this respect.

54. The Player is asking in these proceedings also for a refund, in the amounts of EUR 7,536 and of USD 14,120, for some flights to Qatar, and in the amount of USD 21,557 for the flights to leave Qatar on 23 December 2005. In this respect, the Player is asking that the Decision be modified, since the DRC awarded only the refund of QAR 18,470 plus USD 16,472.

55. The Player is basing his claim on the Club’s contractual obligation to provide him with a “3 Business Class Tickets for the Player and his family” (§ 6 above), where “Family includes wife and maximum 3 children”. On the other hand, the Club denies this request and alleges that no refund should be granted, because the Club has complied with its obligations under the Contract.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

56. With respect to the tickets to Qatar, it is the Panel’s opinion that the amounts paid by the Player should be reimbursed by the Club. These amounts have been indicated by the Player to the Club in the letter dated 12 September 2005 (filed by the Club as Exhibit 13 to its answer); the receipts were given to the Club, which never rejected the reimbursement thereof or expressed any written disagreement (before the matter became controversial in the FIFA and in the current proceedings) with regard thereto.

57. On the other hand, with respect to the tickets from Qatar to Costa Rica, when the Player and his family finally left Doha in December 2005, it is the Panel’s opinion that the amounts claimed by the Player should not be entirely reimbursed by the Club. Indeed, the Panel, by examining and comparing the print-out of the pre-paid tickets issued on 8 October 2005 (filed as Exhibit 12 to its answer by the Club) and the copy of the “passenger receipts” for which the Player requests compensation (filed as Exhibit 13 to his appeal brief by the Player), notes the following: i. the print-out of the pre-paid tickets covers two tickets issued on 8 September 2005, one in the name of Mrs Nunez Carballo and the other in the name of Miss Pamela Wanchope. The print-out also shows that the tickets were related to a round-trip with an open return date from Doha to San José, and that the airfare, net of taxes, for each ticket was USD 7,297 and USD 5,473; ii. the copies of the “passenger receipts” for which the Player requests compensation bear the names of the Player, of Miss Pamela Wanchope, of Mrs Brenda Carballo and of Mr Santos Rojas, where a. the “passenger receipt” in the name of Miss Pamela Wanchope indicates an airfare, net of taxes, of USD 5,473; b. the “passenger receipt” in the name of Brenda Carballo indicates an airfare, net of taxes, of USD 7,297; c. the “passenger receipts” in the name of Miss Pamela Wanchope, of Mrs Brenda Carballo and of Mr Santos Rojas bear the reference to a ticket issued on 8 September 2005, with flight details corresponding exactly to the pre-paid tickets mentioned above; iii. the name of Mr Santos Rojas was not included in the list of persons for which the Club agreed to bear the cost of flight (indicated to be, in the document filed by the Club as Exhibit 11 to its answer, in addition to Mrs Brenda Carballo Nunez and Miss Pamela Wanchope, Mrs Adriana Cecilia Carballo Nunez and Mr Francisco A. Zumbado).

58. In light of such remarks, and chiefly on the basis of the reference to preceding tickets, the Panel finds that the Player has not given sufficient evidence that the “passenger receipts” do not correspond to the return flight left open by the tickets issued on 8 September 2005, that he actually paid for the tickets in the name of Miss Pamela Wanchope, of Mrs Brenda Carballo and of Mr Santos Rojas, and, in any case, that the flight of Mr Santos Rojas (whose relation to the Player has not been indicated) had to be reimbursed by the Club.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

59. At the same time, the Panel is satisfied, on the basis of the “passenger receipt” in his name filed by the Player, that the amount therein indicated, totalling QAR 18,470, has to be reimbursed by the Club on the basis of the Contract. Such ticket, in fact, does not correspond to any preceding ticket issued for the Player.

60. In conclusion, therefore, the Panel holds that the following amounts should be reimbursed to the Player: i. EUR 7,356 and USD 14,120, for the flight of his family to Qatar; and ii. QAR 18,470, for his return to Costa Rica on 23 December 2005.

61. Finally, the Player requests that the Panel imposes the sporting sanction provided by Article 17.4 of the RSTP 2005 to be “automatically applied once established that the Appellant [the Club] breached the employment contract” with the Player.

62. In this regard, the Panel stresses (as made clear in the CAS jurisprudence: CAS 2004/A/780) that it is not for the Player to claim, and the Panel to impose, the sports sanctions and disciplinary measures provided by the RSTP 2005 in the event the Club is found in breach of the Contract. The prerogative to impose such sanctions lies entirely with FIFA, with whose powers the Panel cannot, at this stage, interfere.

63. In the light of the foregoing, the Panel holds that the appeal brought by the Club is to be partially upheld, while the appeal brought by the Player is to be dismissed. The Decision is to be modified so that the Club is ordered to pay the following amounts to the Player:

• EUR 80,000 for the salaries of November and December 2005;

• EUR 75,000 for damages caused by the Club’s breach of the Contract;

• QAR 18,700 as reimbursement for accommodation costs;

• EUR 7,356 and USD 14,120 as reimbursement for the flight of his family to Qatar; and

• QAR 18,470 as reimbursement for his return to Costa Rica on 23 December 2005.

64. The Panel notes that the DRC specifically held that if the amounts granted as compensation or refund are not paid within 30 days of the notification of the Decision “the aforementioned deadline, a 5% interest rate per annum will apply”. This point – as opposed to the question on interest on the outstanding salaries (§ 37 above) – has not been specifically challenged. As a result, the Panel is bound to confirm it, with the specification that interest starts to accrue as from 16 July 2006, since the notification of the Decision took place on 15 June 2006.

Paulo Cesar Wanchope Watson v. Al-Gharafa Sports Club, award of 18 December 2006

The Court of Arbitration for Sport rules that:

1. The appeal filed by Al-Gharafa Sports Club (CAS 2006/A/1123) against the decision issued on 23 March 2006 by the Dispute Resolution Chamber of the FIFA Players’ Status Committee is partially upheld.

2. The appeal filed by Mr Paulo Cesar Wanchope Watson (CAS 2006/A/1124) against the decision issued on 23 March 2006 by the Dispute Resolution Chamber of the FIFA Players’ Status Committee is dismissed.

3. Al-Gharafa Sports Club is ordered to pay to Mr Paulo Cesar Wanchope Watson the following amounts: i. EUR 40,000, plus 5 % interest thereon as from 1 December 2005 until effective payment; ii. EUR 40,000, plus 5 % interest thereon as from 1 January 2006 until effective payment; iii. EUR 75,000, plus 5 % interest thereon as from 16 July 2006 until effective payment; iv. EUR 7,536, plus 5 % interest thereon as from 16 July 2006 until effective payment; v. USD 14,120, plus 5 % interest thereon as from 16 July 2006 until effective payment; vi. QAR 37,170, plus 5 % interest thereon as from 16 July 2006 until effective payment.

(…).