Ismaily SC v. Diego Fernando and Club Nea Salamina Famagusta SC

V. JURISDICTION

73. Article R47 of the Code provides as follows:

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

74. Article 57 (1) of the FIFA Statues (May 2022 Edition) provides as follows:

“Appeals against final decisions passed by FIFA’s legal bodies and against decisions passed by confederations, member associations or leagues shall be lodged with CAS within 21 days of receipt of the decision in question.”

75. The Parties do not dispute the jurisdiction of CAS and confirmed it by signing the Order of Procedure.

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76. It follows that the CAS has jurisdiction to decide the present dispute.

VI. ADMISSIBILITY

77. Article R49 of the Code provides as follows:

“In the absence of a time limit set in the statutes or regulations of the federation, association or sports-related body concerned, or in a previous agreement, the time limit for appeal shall be twenty-one days from the receipt of the decision appealed against. The Division President shall not initiate a procedure if the statement of appeal is, on its face, late and shall so notify the person who filed the document. When a procedure is initiated, a party may request the Division President or the President of the Panel, if a Panel has been already constituted, to terminate it if the statement of appeal is late. The Division President or the President of the Panel renders her/his decision after considering any submission made by the other parties.”

78. Article 57 (1) of the FIFA Statues requires appeals to be lodged within 21 days of receipt of the decision in question.

79. Article 15(5) of the FIFA Procedural Rules Governing the Football Tribunal (edition June 2022) provides as follows:

“Where no procedural costs are ordered, a party has ten calendar days from notification of the operative part of the decision to request the grounds of the decision. Failure to comply with the time limit shall result in the decision becoming final and binding and the party will be deemed to have waived its right to file an appeal. The time limit to lodge an appeal begins upon notification of the grounds of the decision.”

80. The FIFA DRC rendered the Appealed Decision on15 December 2022 and notified its grounds to the Parties on 9 February 2023. The last day of the 21-day period by which the Appellant was required to have filed the Statement of Appeal was therefore 2 March 2023. The Appellant submitted its Statement of Appeal on 2 March 2023 and it was therefore submitted in a timely manner.

81. The admissibility of the appeal was challenged by the Respondents on the basis that the Appellant submitted the Appeal Brief after the relevant deadline of Thursday 13 April 2024. On 21 September 2023, the CAS Court Office notified the Parties that the Sole Arbitrator had decided to reject the objection to the admissibility of the Appeal Brief and that the reasons would be explained in the Award.

82. The reasons for the Sole Arbitrator’s decision are as follows:

a) Pursuant to Article R31 of the Code, written submissions must be filed by courier. Article R32 of the Code provides as follows:

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“[…] The time limits fixed under this Code are respected if the communications by the parties are sent before midnight, time of the location of their own domicile or, if represented, of the domicile of their main legal representative, on the last day on which such time limits expire […]”

b) The Appellant e-mailed the Appeal Brief to the CAS Court Office at 00:14 on 14 April 2023 (Egyptian time). As such, it initially appeared that the Appeal Brief had been submitted after the relevant deadline. However, on 20 April 2023, the Appellant provided the following evidence that they had actually sent the Appeal Brief by courier on 13 April 2023: (i) a “payment receipt” document from local courier firm, ABS Co, dated 13 April 2023 (the “ABS Document”); and (ii) a tracking document from the international courier firm, UPS, dated 15 April 2023.

c) The Respondents challenged the validity of the ABS Document. In his Answer, the First Respondent submitted, inter alia, as follows:

“The sole piece of evidence presented, a receipt from ABS Express Courier, could easily have been manually completed by anyone, and it is worth noting that the receipt lacks any signature or acknowledgment of receipt from the courier company.

Additionally, the only computer-generated document indicating the date of document submission clearly states that it was sent on April 15, 2023, which is beyond the established deadline.”

d) The Second Respondent made materially similar arguments in their Answer.

e) The ABS Document is prima facie valid, in that it states that ABS received a payment from the Appellant’s legal advisor on 13 April 2023 for making a shipment to Switzerland. While the Respondents have expressed concerns as to the document’s validity, the Sole Arbitrator notes that: (i) they have not provided any evidence to support their concerns; and (ii) failing any such evidence and submission, it is not for the CAS to investigate whether the ABS Document is a forgery. In these circumstances the Sole Arbitrator has no reason to consider that the Appeal Brief was not filed within the relevant deadline.

83. Accordingly, the Appellant’s appeal to CAS is admissible.

VII. APPLICABLE LAW

84. Article R58 of the Code provides as follows:

“The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or

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sports-related body which has issued the challenged decision is domiciled or according to the rules of law that the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision.”

85. FIFA is the body which issued the Appealed Decision and it is domiciled in Switzerland. Furthermore Article 56(2) of the FIFA Statutes (May 2021 Edition) provides as follows:

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

86. Accordingly, the Sole Arbitrator is satisfied that the various regulations of FIFA (and specifically the FIFA RSTP) shall apply and that Swiss law shall apply additionally to fill in any gaps or lacuna when appropriate.

VIII. MERITS

87. According to Article R57.1 of the Code, a panel has “full power to review the facts and the law”. As repeatedly stated in the CAS jurisprudence (e.g. CAS 2007/A/1394), by reference to this provision the CAS appeals arbitration procedure entails a de novo review of the merits of the case, and is not confined merely to deciding whether the ruling appealed was correct or not. Accordingly, it is the function of the Sole Arbitrator to make an independent determination as to merits.

88. In light of the facts and the circumstances of the case, as well as considering the Appellant’s contentions in support of its claims, the Sole Arbitrator considers that the main issues to be resolved are the following:

a) What is the applicable burden and standard of proof?

b) Is the Waiver enforceable?

c) Did the Player validly terminate the Employment Contract with just cause for outstanding salaries pursuant to Article 14bis of the FIFA RSTP?

d) If not, did the Player have any other grounds to terminate the Employment Contract with just cause pursuant to Article 14 of the FIFA RSTP?

e) If the Player terminated the Employment Contract with just cause: i. What level of compensation should be awarded to the Player? ii. Should Ismaily SC be subject to sporting sanctions?

f) If the Player terminated the Employment Contract without just cause: i. What level of compensation should be awarded to Ismaily SC? ii. Should the Player or Famagusta SC be subject to sporting sanctions?

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A. What is the applicable burden and standard of proof?

89. The FIFA Procedural Rules governing the Football Tribunal govern the organisation of the following chambers: (i) the FIFA DRC; (ii) the FIFA PSC; and (iii) the FIFA Agents’ Chamber. Article 13(5) of those rules (both the May 2021 Edition and June 2022 edition) state as follows:

“A party that asserts a fact has the burden of proving it.”

90. Furthermore, the concept of burden of proof has been considered in many CAS decisions and is well established CAS jurisprudence. It was set out in CAS 2007/A/1380 as follows:

“According to the general rules and principles of law, facts pleaded have to be proved by those who plead them, i.e., the proof of facts, which prevent the exercise, or extinguish, the right invoked, must be proved by those against whom the right in question is invoked. This means, in practice, that when a party invokes a specific right it is required to prove such facts as normally comprise the right invoked, while the other party is required to prove such facts as exclude, or prevent, the efficacy of the facts proved, upon which the right in question is based. […] It is well established CAS jurisprudence that any party wishing to prevail on a disputed issue must discharge its burden of proof, i.e. must give evidence of the facts on which its claim has been based. […] The two requisites included in the concept of “burden of proof” are (i) the “burden of persuasion” and (ii) the “burden of production of the proof”. In order to fulfil the burden of proof, the Club must, therefore, provide the Panel with all relevant evidence that it holds, and, with reference thereto, convince the Panel that the facts it pleads are true, accurate and produce the consequence envisaged by the Club. Only when these requirements are complied with has the party fulfilled its burden and has the burden of proof been transferred to the other party” (see also CAS 2005/A/968 and CAS

“[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… Hence, if a party wishes to establish some facts and persuade the deciding body, it must actively substantiate its allegations with convincing evidence.”

92. It follows therefore that each Party must fulfil its burden of proof to the required standard by providing and referring to evidence to convince the Sole Arbitrator that the facts it pleads are established.

93. As to the question of what the standard of proof is, the Sole Arbitrator makes the following observations:

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a) Neither the Swiss Private International Law Act nor the Code prescribe a “standard of proof” applicable to CAS proceedings.

b) According to legal authorities, the parties to CAS arbitration proceedings are entitled to enter into a separate agreement on the evidential procedures to be followed, provided that these do not depart from mandatory procedural requirements of the Code. See the chapter entitled “Evidentiary Issues Before CAS” by Rigozzi/Quinn which is contained in “International Sports Law and Jurisprudence of the CAS - 4th Conference CAS & SAV/FSA Lausanne 2012, Editions Weblaw 2014” edited by Bernasconi M. (“Rigozzi/Quinn”). In this case, the Parties have not agreed, or otherwise expressed a view as to, the standard of proof to be applied.

c) Consistent CAS jurisprudence has upheld the right of a sports-governing body to set its own standard of proof (see, for example, CAS 2011/A/2426 and CAS 2011/A/2625). The regulations applicable to this case (i.e. the FIFA RSTP) are silent on this.

d) Where no applicable standard of proof is specified in the applicable regulations, CAS jurisprudence confirms that the Sole Arbitrator has the discretion to determine the appropriate standard although, as indicated in CAS 2010/A/2172, the Sole Arbitrator should at least consider consistent CAS jurisprudence in similar fields when exercising this discretion. The Sole Arbitrator notes that previous CAS panels have generally applied the “comfortable satisfaction” standard when considering cases involving the FIFA RSTP. See, for example, the panel in CAS 2011/A/2426, that standard is considered to be “higher than the civil standard of “balance of probability” but lower than the criminal standard of “proof beyond a reasonable doubt””.

e) The following FIFA regulations adopt the standard of comfortable satisfaction: (i) Article 35 of the FIFA Disciplinary Code (for the standard of proof to be applied in FIFA disciplinary proceedings); (ii) Article 48 of the FIFA Code of Ethics (for the standard of proof to be applied by FIFA’s Ethics Committee); and (iii) Article 68(1) of the FIFA Anti-Doping Regulations (for the standard of proof to establish an anti-doping rule violation).

94. In light of the above observations, the Sole Arbitrator considers it most appropriate to apply the standard of “comfortable satisfaction”.

B. What is the effect of the Waiver?

95. Ismaily SC sought to argue that the Waiver served as proof of the club having fulfilled its financial obligations towards the Player in respect of season 2021/22, even in circumstances where the Player was unable to cash the USD 30,000 cheque issued to him by the club.

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96. While the Waiver did not make reference to the settlement amount of USD 30,000 or stipulate that the Player’s agreement to waive claims against Ismaily SC was conditional upon him receiving such amount, the Sole Arbitrator does not accept Ismaily SC’s argument for the following reasons:

a) It is beyond coincidence that both the cheque and Waiver were dated 12 June 2022 and it can reasonably be concluded that the club issued the cheque to the Player in return for him signing the Waiver.

b) It would be entirely inconsistent with the Player’s prior conduct for him to waive his claim for outstanding salaries without being compensated for doing so.

c) Ismaily SC submitted that, as an experienced professional footballer who was receiving legal advice, the Player should have insisted on including wording which made clear that his waiver of claims was conditional upon receipt of the settlement amount. It is self-evident that Ismaily SC (a long-established professional football club) and the Player (a non-Egyptian who had been in the country for only a few months and whose legal advisor was based in Bolivia) were materially unbalanced in terms of their respective business experience at the time of entering into the Waiver. Accordingly, the Sole Arbitrator does not accept that the Player was in a position to negotiate a comprehensive legal document which protected his interests.

d) The Waiver was on the headed letter paper of Ismaily SC, and therefore would have been drafted by the club. It would be contrary to the principle of “in dubio contra stipulatorem” for the club to benefit from omissions in the drafting.

97. Accordingly, notwithstanding the terms of the Waiver, the Sole Arbitrator does not consider it to be enforceable as the Player was not compensated for entering into it.

C. Did Ismaily SC terminate the Employment Contract with just cause pursuant to

Article 14bis?

98. Article 14bis of the FIFA RSTP provides as follows:

“1. In the case of a club unlawfully failing to pay a player at least two monthly salaries on their due dates, the player will be deemed to have a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted a deadline of at least 15 days for the debtor club to fully comply with its financial obligation(s). […]”

99. Ismaily SC and the Player engaged in protracted and fractious communications with respect to outstanding salaries. However, these concerned the quantum, rather than the existence, of outstanding salaries. Ismaily SC did not dispute that they had only paid the Player the first instalment due on 14 January 2022. In their submissions, Ismaily SC

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referred to documents (including inter alia the letter and Settlement Statement sent to the Player on 9 June 2022) which set out their position as to the salaries already paid to the Player and the salaries still outstanding. Their position can be summarised as follows:

a) The total salaries payable by Ismaily SC to the Player for season 2021/22 were USD 173,333 gross (USD 130,000 net of tax).

b) Pursuant to the Ismaily Financial Regulations (which were incorporated into the Employment Contract by reference), Ismaily SC were entitled to withhold payment of 25% of the total salaries payable for a season until the end of that season and only pay them if the Player has participated in at least 80% of the club’s matches. Accordingly, the sixth and seventh instalments of the salaries payable (representing USD 44,003 or 25% of the total) were scheduled for payment after the end of season 2021/22.

c) Ismaily SC paid the Player the first instalment of USD 86,666 gross (USD 65,000 net) in two instalments on 17 January 2022 and 18 February 2022.

d) Ismaily SC did not pay any further instalments prior to the Player issuing the Default Notice on 23 May 2022. Upon receipt of the Default Notice, they offered to pay USD 21,325 which was calculated as follows:

USD 32,000 – This represents the net amount of the second, third, fourth and fifth instalments of salaries due for season 2021/22. Each instalment was for USD 10,666 gross (USD 8,000 net) and unconditional on matches played.

LESS

USD 3,175 – This represents a disciplinary sanction for the Player allegedly refusing to participate in training on 28 March 2022.

LESS

USD 7,500 – This represents hotel expenses which Ismaily SC claims to have incurred on behalf of the Player and to have been entitled to deduct from his salary.

100. Accordingly, Ismaily SC acknowledged in their own submissions that there were four months of outstanding salaries as at the date of the Default Notice.

101. For Article 14bis of the FIFA RSTP to apply, the Sole Arbitrator must be satisfied that the Player provided Ismaily SC with written notice of their default and gave them at least 15 days to fully comply with their financial obligation(s).

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102. The Player’s position in this regard can be summarised as follows:

a) On 23 May 2022, he issued a Default Notice which notified Ismaily SC that they had failed to pay him at least two monthly salaries on their due dates (i.e. the instalments due in February and March 2022). He gave the club 15 days to make payment of the relevant amounts, failing which he would terminate the Employment Contract with just cause for outstanding salaries pursuant to Article

b) On 19 June 2022, the Player terminated the Employment Contract after Ismaily SC’s bank failed to honour a cheque for USD 30,000 which the club had issued to the Player to settle all claims for outstanding salaries, including the February and March 2022 instalments referenced in the Default Notice.

103. Ismaily SC put forward an alternative position which can be summarised as follows:

a) The outstanding salaries referred to in the Default Notice were wrong as the Player calculated them based on gross amounts.

b) Between the date of the Default Notice and the date of the Waiver, the Player claimed for amounts which the club considered to be in excess of the actual amounts outstanding. This was due to the Player’s failure or refusal to take into account the following: (i) the club’s entitlement to deduct income tax and hotel expenses in excess of the Player’s contractual accommodation allowance; (ii) the deduction of a financial sanction for refusal to take part in training; and (iii) the sixth instalment of salary was conditional on the Player participating in 80% of the club’s matches for that season.

c) They reluctantly agreed to settle the Player’s claim for outstanding salaries for season 2021/22 for USD 30,000 – i.e. for USD 8,675 more than they considered was due.

d) On 19 June 2023, when the Player was unable to cash the club’s cheque for the settlement amount of USD 30,000, he should have issued a fresh default notice to the club for that amount, giving them 15 days to comply with their obligation.

104. The Sole Arbitrator observes that there was considerable confusion on the Player’s part with respect to the quantum of outstanding salaries, despite the Player having the benefit of legal advice. For example:

a) As noted by Ismaily SC, the Player initially failed to take income tax deductions into account. This resulted in the Default Notice wrongly demanding payment of USD 42,998 in lieu of the balance of the first salary instalment (which, in

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fact, had already been paid in full) and the gross amounts of the second and third salary instalments.

b) On 7 June 2022, the Player changed his position and demanded payment of USD 40,000, being the net amounts of the second, third, fourth, fifth and sixth salary instalments (payable in February, March, April, May and June respectively). The Player included the June instalment, despite it being conditional on the Player having participated in at least 80% of the club’s matches. It is evident from the Player’s Answer that he understood and accepted the concept of conditional salary, even if he did not grasp the precise detail of the Ismaily SC Financial Regulations. At paragraph 24 of his Answer, the Player states as follows: “In accordance with the Employment Contract, the Club had the obligation to pay 10.666 US every month from February 1st and until June 1st, plus a payment of 33.337 US on August 1st, corresponding to a 20% (sic) of the total amount of that season, to be paid only if the Player had played more than 80% of the games.” In the same correspondence, the Player also gave Ismaily SC the option of paying the lesser amount of USD 24,000.

c) On 9 June 2022, Ismaily offered to settle for USD 24,000 in line with the Player’s demand of 7 June 2022.

d) The Player entered into the Waiver dated 12 June 2022 and Ismaily SC issued a cheque of the same date to the Player for USD 30,000. It is reasonable to assume that this was the result of the Player once again changing his position on the quantum of outstanding salaries.

105. The Player terminated the Employment Contract on 19 June 2022. Accordingly, to constitute termination with just cause pursuant to Article 14bis of the FIFA RSTP, the Player was required to have issued a default notice to Ismaily SC on or before 4 June 2022. The only relevant document issued by the Player to Ismaily SC prior to that date was the Default Notice. The question to be answered therefore is whether the Default Notice satisfied the terms of Article 14bis by granting “a deadline of at least 15 days for [Ismaily SC] to fully comply with its financial obligation(s)”? The Sole Arbitrator makes the following observations in this regard:

a) It is well established in CAS jurisprudence and Swiss law that termination of a contract should always be an action of last resort (an “ultima ratio” action). See, for example, CAS 2014/A/3684 and CAS 2014/A/3693. As explained by the panel in CAS 2018/A/6029, this principle is intended to ensure that the defaulting party is given a chance to comply with its obligations and, if it accepts the claim is legitimate, to rectify the situation.

b) On 7 June 2022, the Player re-stated Ismaily SC’s outstanding financial obligations, setting out the position net of tax and demanding a lower amount of either USD 40,000 or USD 24,000. By doing so, he effectively acknowledged

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that the original Default Notice was incorrect (to the detriment of Ismaily SC) and no longer valid.

c) Accordingly, it must be concluded that the Player failed to satisfy the terms of Article 14bis and did not terminate the Employment Contract with just cause for outstanding salaries in accordance with Article 14bis.

106. On 19 June 2022, when the Player was unable to cash the cheque for USD 30,000, the correct course of action (and consistent with the principle of ultima ratio) would have been for him to notify Ismaily SC of the issue and give the club an opportunity to remedy it before 29 June 2022.

107. Ismaily SC alleged that the Player deliberately failed to cash the USD 30,000 cheque on 19 June 2022 by refusing to follow the bank’s process for cashing US dollar cheques into local currency. The Sole Arbitrator makes the following observations:

a) Ismaily SC provided a bank statement in evidence which showed that, on the date that the Player attempted to cash the cheque (i.e. 19 June 2022), their bank account with the Commercial International Bank was EGP 1,101,295 in credit and then EGP 3,010,295 in credit later that day following a deposit of EGP 2,000,000. According to www.xe.com, the USD:EGP exchange rate on 19 June 2022 was 1 USD = EGP 18.7229. Accordingly, the USD equivalent in their bank account was USD 58,820 then USD 160,781. However, the Sole Arbitrator notes that the bank account number on the cheque (100006812931) does not match the bank account number on the bank statement (100052711268).

b) Ismaily SC also provided an attestation from the Commercial International Bank which confirmed that Article 510 of Egyptian Trade Law no. 17/1999 states as follows: “If the cheque is issued in a foreign currency in Egypt and the debtor has no balance to fulfill (sic) its amount, the cheque can be cashed based on the Egyptian currency according to the currency conversion rate on the date of submitting the cheque, unless the beneficiary refuses this process”. This attestation does not confirm whether the bank actually offered that option to the Player and (if the bank did) whether the Player declined it. In any event, the Employment Contract obliged Ismaily SC to pay the Player in USD, so the Player was not under any obligation to accept payment in EGP.

c) The Player provided a document evidencing that the Commercial International Bank had rejected the USD 30,000 cheque because of insufficient funds in Ismaily SC’s account number 100006812931.

d) There was no economic incentive for the Player to engineer an exit from Ismaily SC in order to join Famagusta SC. The residual value of the Employment Contract (USD 1,366,660) was materially higher than the financial terms he entered into with Famagusta SC (approximately USD 117,000).

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e) Accordingly, the Sole Arbitrator is comfortably satisfied that the Player attempted to cash the cheque for USD 30,000 on 19 June 2022 and that the reason the Commercial International Bank refused to do so was because Ismaily SC had insufficient USD in the relevant bank account. Nevertheless, by terminating the Employment Contract immediately, rather than giving Ismaily SC the opportunity to rectify matters, the Player failed to comply with the criteria of Article 14bis of the FIFA RSTP.

D. Did the Player terminate the Employment Contract with just cause pursuant to

Article 14?

108. Article 14 of the FIFA RSTP provides as follows:

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

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

109. The Player alleged various instances of abusive conduct and grounds for terminating the Employment Contract for just cause. These included, inter alia, the following:

a) In February 2022, Ismaily SC changed their coach following a poor run of results. The new coach blamed the club’s foreign players for the poor results and instructed them to train separately from the first team for the remainder of the season. Ismaily SC denied this. The Player referred to a sworn statement as evidence in support of this (i.e. “Exhibit No. 1 and Video No. 1 recorded on date 23 June 2022”). As already mentioned in this Award, the sworn statement is missing from the evidence actually filed by the Player.

b) Ismaily SC withheld the Player’s passport throughout his time in Egypt. On 24 May 2022, the Player contacted the Argentinian embassy to seek their help in recovering his passport from the club. The club claimed that: (i) they hold the passports for all players as they are required for administrative reasons; and (ii) as demonstrated when the Player previously returned to Argentina, they return the passport to a player when required.

c) In his letter of 27 May 2022 to Ismaily SC, the Player complained that he was not permitted to stay in the hotel used by the remainder of team because he refused to sign a blank document and therefore had to book his own hotel. In his letter of 7 June 2022, the Player somewhat inconsistently complained about the club deducting hotel costs from his salary for a hotel which the club had chosen. Ismaily SC denied the Player’s allegations and claimed that the Player had chosen to stay in the Mercure Hotel as it was more luxurious than the team-hotel.

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d) The Player was asked to sign prejudicial documents without the support of a translator, despite him requesting the club to communicate only with his lawyer. The Player referred to a sworn statement as evidence in support of this (i.e. “Video No. 2”). As already mentioned in this Award, this is missing from the evidence actually filed by the Player. Ismaily SC denied this.

e) The Player was wrongly accused of concocting a scheme to leave the club under false pretenses.

f) Ismaily SC were constantly in arrears with respect to the salary payable under the Employment Contract.

110. The burden of proof for establishing just cause to terminate pursuant to Article 14 of the FIFA RSTP sits with the Player. However, he has submitted insufficient evidence for the Sole Arbitrator to be comfortably satisfied as to the existence of just cause and/or abusive conduct.

E. Consequences of terminating the Employment Contract with just cause

111. As it has been determined that the Player terminated the Employment without just cause, it is not necessary to consider this issue any further.

F. Consequences of terminating the Employment Contract without just cause

112. Article 17 of the FIFA RSTP provides as follows:

“1. In all cases, the party in breach shall pay compensation […] compensation for the breach shall be calculated with due consideration for the law of the country concerned, the specificity of sport, and any other objective criteria. These criteria shall include, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.

[…]

2. […] If a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment […]

3. In addition to the obligation to pay compensation, sporting sanctions shall also be imposed on any player found to be in breach of contract during the protected period. […]

4. “In addition to the obligation to pay compensation, sporting sanctions shall be imposed on any club found to be in breach of contract or found to be inducing a breach of contract during the protected period. It shall be presumed, unless established to the

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contrary, that any club signing a professional who has terminated his contract without just cause has induced that professional to commit a breach […].”

113. Accordingly, the following issues require to be considered: (i) the quantum of compensation to be awarded to Ismaily SC; (ii) whether sporting sanctions should also be imposed on the Player; and (iii) whether sporting sanctions should be imposed on Famagusta SC.

I The quantum of compensation to be awarded to Ismaily SC

114. When calculating the compensation due, a judicial body must establish the damage suffered by the injured party, taking into consideration the particular circumstances of the case, the arguments raised by the parties and the evidence produced. A judicial body shall be led by the principle of the so-called “positive interest” – i.e. it will aim at determining an amount which shall basically put the injured party in the position that the same party would have had if the contract was performed properly. It is the party requesting compensation who must state their case and bears the burden of proof.

115. The Sole Arbitrator notes the following excerpts from FIFA’s “Commentary on the RSTP” with respect to Article 17 of the FIFA RSTP:

“According to the [FIFA] DRC jurisprudence […] the compensation payable by the player to their previous club is calculated based on the average remuneration due to the player under their previous contract and their new contract over the remaining term of the contract that was prematurely terminated. Any non-amortised fees and expenses paid or incurred by the former club are then added to the value of the two contracts. Typically, “fees” for calculation purposes will include the transfer fee paid to acquire the player’s services, as well as fees paid to agents in relation to the transfer concerned.

On a few occasions, considering the particular circumstances of a case, the [FIFA] DRC has deviated from the general formula described above, based on the specificity of sport.

[…]

CAS jurisprudence on the calculation of compensation due to a club in the event of a breach of contract regularly stresses a wide margin of discretion when applying article 17.2. By the same token, it is commonly agreed that the list of criteria in article 17 is not exhaustive. Consequently, the way article 17 is applied remains highly dependent on the individual Panel hearing the case..

[…]

While certain elements and principles do recur, thus providing the basis for established jurisprudence, [various CAS] decisions all took new factors into account that had not been considered in previous judgments. It must therefore be concluded that each case

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has its own characteristics, and that different Panels may adopt different approaches to the cases before them. […]”

116. Ismaily SC submitted that compensation should be quantified as follows: (i) the residual value of the Employment Contract; plus (ii) the unamortised value of the transfer fee paid by Ismaily SC to secure the Player’s registration; plus (iii) a further amount based on the specificity of sport. The Sole Arbitrator makes the following observations with respect to this quantification methodology and the manner in which Ismaily SC have applied it:

a) Based on a termination date of 19 June 2022, Ismaily SC calculated the residual value of the Employment Contract to be USD 1,366,660, comprising: (i) for season 2021/22 - One instalment of USD 33,337, payable on 1 August 2022; (ii) for season 2022/23 – USD 293,333; (iii) for season 2023/24 – USD 320,000; (iv) for season 2024/25 – USD 346,666; and (v) for season 2025/26 – USD 373,333. According to the Ismaily Financial Regulations, the final instalment of 2021/22 and 25% of all further salaries were conditional upon the Player participating in 80% of Ismaily SC’s matches. Clearly that conditionality could not be met. Accordingly, the Sole Arbitrator considers that the residual value of the Employment Contract was USD 999,999.

b) Ismaily SC did not take into account the remuneration due to the Player under the new contract with Famagusta SC – i.e. EUR 110,000, which equates to USD 116,997 based on an exchange rate of EUR 1 = USD 1.0636.

c) Ismaily SC paid a transfer fee of USD 250,000 for the Player. On the basis that the club benefitted from the Player’s registration for half of a season, instead of four and a half seasons, the unamortised fees were USD 222,000.

d) Ismaily SC also claimed an amount equal to six months’ salary (USD 48,000) based on the specificity of sport “bearing in mind the fact that the Player terminated […] within the protected period, and given his bad faith and all his malicious acts”. While the Employment Contract was terminated during the protected period, the Sole Arbitrator is not comfortably satisfied that the Player acted in bad faith or with malice. Indeed: (i) as at 19 June 2022, there were four instalments of outstanding salaries due to the Player, with the earliest dating from 1 February 2022; and (ii) the Player’s attempt to cash the club’s cheque for USD 30,000 was unsuccessful due to a lack of funds in the club’s bank account. The only reason the Player is not considered to have terminated the Employment with just cause for outstanding salaries is his failure to give Ismaily SC sufficient notice to remedy the issue.

117. While acknowledging that this case has its own characteristics, the Sole Arbitrator considers the following CAS jurisprudence to be relevant to the current case:

a) CAS 2008/A/1519 & 1520 (the “Matuzalem” case) - The panel observed that, “while the information on the remuneration under the existing contract may

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provide a first indication on the value of the services of the player for that employing club, the remuneration under the new contract may provide an indication not only on the value that the new club/clubs is/are giving to the player, but possibly also on the market value of the services of the player […]” Indeed, the panel ultimately established the value of the player’s services based solely on his remuneration under his new contract and the residual value of the prematurely terminated contract was viewed as an expense saved by the player’s club. The panel also considered the fees and expenses paid or incurred by the former club, amortised over the term of the contract until the date of the termination.

b) CAS 2015/3955 & 3956 (the “Maazou” case) – The panel rejected the former club’s entitlement to compensation following the early termination of a contract by a player without just cause on the basis that the club itself bore a significant measure of responsibility for the termination. In this instance, the club admitted not having paid the player the equivalent of two-and-a-half months’ salary and that they had informed him he would no longer be considered part of the squad.

118. Applying the methodology adopted in “Matuzalem” to the current case, then the compensation payable to Ismaily SC comprises the following elements:

a) The remuneration element – The value that Famagusta SC and the Player gave to the services of the Player for the remaining term of the Employment Contract was USD 116,997 multiplied by four seasons, which equals USD 467,988.

b) The value of the services that the former club no longer enjoys or (alternatively) the missed transfer fees suffered by the former club – In both instances a third party offer provides a useful indication as to the market of a player’s registration. In this case, Ismaily SC did not provide evidence of any such offer. Furthermore, the following factors suggest that the Player’s transfer value would have been negligible at the relevant time: (i) the Player accepted a material reduction in remuneration; and (ii) Famagusta SC did not pay the Player any form of signingfee.

c) The residual value of the Employment Contract - Due to the termination of the Employment Contract, Ismaily SC was no longer required to pay any salary to

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the Player. The corresponding amount (in this case USD 999,999) represents saved expenses rather than financial damages.

d) The unamortised value of fees and expenses paid by Ismaily SC – As already established, Ismaily SC incurred USD 222,000 of unamortised transfer fees with respect to the Player.

e) Any other objective criteria – No Party referenced any other objective criteria and the Sole Arbitrator does not consider there to be any.

f) The law of the country concerned - No Party submitted any legal arguments according to which a national law could have an effect on the calculation of the compensation due. Accordingly, the Sole Arbitrator is not in a position to consider this criterion.

g) The specificity of sport – A solution should take into account not only the interests of the player and clubs involved, but more broadly the whole football community. Factors taken into account by the panel in Matuzalem included inter alia: (i) the time remaining on the existing contract up to a maximum of five years, with an early termination potentially being considered more disruptive to the wronged party; and (ii) the status and behaviour of the Player. In this case, while the Player terminated the Employment Contract only six months into a four and a half-year term, he remained with the club and continued to train and be available for selection until the end of season 2022/23 despite not having been paid any salary for four months. On this basis, the Sole Arbitrator considers that no additional compensation is justified under this criterion.

119. The Sole Arbitrator considers that no compensation should be awarded to Ismaily SC on the basis that the saved expenses which Ismaily SC has benefitted from (USD 999,999) exceed the compensation to which they are entitled under the relevant heads of loss, being: (i) the remuneration element of USD 467,988; plus (ii) the unamortised value of fees and expenses paid by Ismaily SC of USD 222,000.

II Should the Player or Famagusta SC be subject to sporting sanctions?

120. The Appellant did not request the imposition of sporting sanctions. As established in CAS jurisprudence (see, for example, CAS 2016/A/4826) there is no legal basis, whether in the FIFA RSTP or otherwise, for the victim of a termination of contract without just cause to request that sporting sanctions as foreseen in Article 17 of the FIFA RSTP be imposed upon the party/parties at fault. Only FIFA has the power to impose such sanction(s), and FIFA is not a party to this case.

121. Accordingly, neither the Player nor Famagusta SC shall be subject to sporting sanctions.

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G. Conclusions

122. In summary, the Sole Arbitrator finds as follows:

a) The Player terminated the Employment Contract without just cause.

b) However, Ismaily SC shall not be awarded any compensation as their financial savings exceed their losses.

c) No sporting sanctions shall be imposed on the Player or Famagusta SC as FIFA is not a party to this appeal and only FIFA has the power to impose sporting sanctions.

d) Ismaily SC’s appeal is partially accepted.

e) The Appealed Decision shall be set aside and replaced by the following:

i. The Player terminated the Employment Contract without just cause.

ii. Ismaily SC’s are not awarded any financial compensation as they did not suffer any financial loss as a consequence of the termination.

IX. COSTS

(…).

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