Maxim Astafiev v. FC Mordovia, Russian Football Union (RFU)

V. JURISDICTION

28. The jurisdiction of the CAS – which is not disputed by the parties – derives from:

Article 47 of the FUR Statutes which provides:

“[…] 3. In accordance with the specific provisions of FIFA Statutes, UEFA Statutes and FUR Statutes any appeal against final and legally binding decisions passed by FIFA, UEFA and RFU may be heard by the CAS. […]”.

Article 53 of the FUR Regulations which provides:

“[…] 2. The Committee’s or the DRC’s decision, made on the cases stipulated in subparagraphs “b”, “c”, “d”, “e”, “f” of the paragraph 1, article 13 of the present Regulations, can be appealed only to the Court of Arbitration for Sports (Tribunal Arbitral du Sport) in Lausanne (Switzerland) within 21 calendar days from receipt of the full text of the decision of the Committee or the DRC, by both parties”.

and Article R47 of the Code which provides:

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

29. Therefore, the Sole Arbitrator considers that CAS is competent to decide this case.

VI. ADMISSIBILITY

30. 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”.

31. The Appealed Decision was notified to the Appellant on 4 September 2018. The statement of appeal was filed on 24 September 2018, i.e. within the deadline of 21 days set by Article 53 para. 2 of the FUR Regulations and Article R49 of the Code. The appeal brief was filed in due time. The appeal further complied with all other requirements of Articles R48 and R51 of the Code, including the payment of the CAS Court Office fee. Therefore, the appeal is admissible.

VII. APPLICABLE LAW

32. It is generally accepted that the choice of the place of arbitration also determines the law to be applied to arbitration proceedings. The Swiss Private International Law Act (“PILA”) is the relevant arbitration rule of law for an arbitration held in Switzerland (DUTOIT B., Droit international privé suisse, Commentaire de la loi fédérale du 18 décembre 1987, Bâle 2005, N. 1 on Article 176 PILA; TSCHANZ P-Y., in: Commentaire romand, Loi sur le droit international privé - Convention de Lugano, 2011, n° 1, p. 1627, ad Article 186 PILA). Article 176 para. 1 PILA provides that the provisions of Chapter 12 PILA regarding international arbitration shall apply to any arbitration if the seat of the arbitral tribunal is in Switzerland and if, at the time the arbitration agreement was entered into, at least one of the parties had neither its domicile nor its usual residence in Switzerland.

33. CAS has its seat in Lausanne, Switzerland. Therefore, the PILA is applicable. Article 187 para. 1 of the PILA provides – inter alia – that “the arbitral tribunal shall rule according to the law chosen by the parties or, in the absence of such a choice, according to the law with which the action is most closely connected”. According to the legal doctrine, the choice of law made by the parties can be tacit and/or indirect, by reference to the rules of an arbitral institution. In agreeing to arbitrate the present dispute according to the Code, the parties have submitted themselves to the conflict-of-law rules contained therein, in particular to Article R58 of the Code (CAS 2008/A/1705 para. 9 and references; CAS 2008/A/1639, para. 21 and references).

34. Article R58 of the Code provides the following:

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

35. Article R58 of the Code indicates how the Sole Arbitrator must determine which substantive rules/laws are to be applied to the merits of the dispute. This provision recognizes the preeminence of the “applicable regulations” to the “rules of law chosen by the parties”, which are only applicable “subsidiarily”. Article R58 of the Code does not admit any derogation and imposes a hierarchy of norms, which implies for the Sole Arbitrator the obligation to resolve the matter pursuant to the regulations of the relevant “federation, association or sports-related body”. Should this body of norms leave a lacuna, it would be filled by the “rules of law chosen by the parties”.

36. According to the Contract, the parties agreed that:

3.2. “The Employee has the rights and responsibilities in accordance with the labor legislation and other normative legal acts of the Russian Federation containing employment and labor laws, collective agreements, agreements, as well as local normative acts, adopted by the Employer taking into consideration the norms of the FUR, regulatory documents of FIFA, UEFA and the FUR”.

4.2. “The Employer has the rights and responsibilities in accordance with the labor legislation and other normative legal acts of the Russian Federation containing employment and labor laws, collective agreements, agreements, as well as local normative acts, adopted by the Employer taking into consideration the norms of the FUR, regulatory documents of FIFA, UEFA and the FUR”.

37. Therefore, the Sole Arbitrator deems it appropriate to apply the FUR Regulations and, on a subsidiary basis, Russian law to the dispute.

VIII. PRELIMINARY REMARKS

38. The Club and FUR failed to participate in this arbitration and did not submit an answer to the appeal brief nor any other written submission. With respect to such a situation, Article R55 para. 2 of the Code states the following:

“If the Respondent fails to submit its answer by the stated time limit, the Panel may nevertheless proceed with the arbitration and deliver an award”.

39. Based on this provision, the failure of the Club and FUR to participate in the arbitration has no direct effect on the jurisdiction of the Sole Arbitrator. The Sole Arbitrator therefore proceeded with the arbitration notwithstanding the Club’s and FUR’s refusal to take part in the proceedings.

40. In commercial arbitration, leading authorities stress that the failure of one party to participate in the proceedings cannot be taken as acquiescence in the other party’s claims or allegations. Therefore, even if a party fails to take part in the arbitral procedure, the tribunal must proceed to determine the facts of the case (BÜHLER/WEBSTER, Hand-book of ICC Arbitration, 3rd ed., London 2014, paras. 6-119 et seq.; CRAIG/PARK/PAULSSON, Annotated Guide to the 1998 ICC Arbitration Rules, Paris 1998, page 62). The Sole Arbitrator holds that these principles must also apply to this arbitration.

41. Furthermore, pursuant to Article R44.3 in connection with Article R57.3 of the Code, the Sole Arbitrator may at any time order the production of additional documents if he deems it appropriate to supplement the presentations of the parties. Further, it is generally accepted in international arbitration that if a party refuses to comply with a production order without a reasonable excuse, the arbitral tribunal may infer that such documents would be adverse to the interests of said party and that the party may have something to hide (Article 9(5) of the IBA Rules on the Taking of Evidence in International Arbitration; CAS 2015/A/3883, para. 64).

42. The Sole Arbitrator holds that these principles must also apply to this arbitration and communicated this to the Club and FUR with his request for the production of documents dated 8 April 2019.

IX. MERITS — A. Scope of the proceeding

43. The Sole Arbitrator establishes that the payment of the remuneration according to Article 7.4. of the Contract is in dispute. According to this clause, the Club was obliged to pay the following:

- RUB 862’500 by 1 November 2016 (the “first installment”);

- RUB 862’500 by 1 March 2017 (the “second installment”);

- RUB 862’500 by 5 September 2017 (the “third installment”);

- RUB 862’500 by 1 March 2018 (the “fourth installment”).

44. The Club does not contest that the Player was entitled to such payments according to the Contract. It is further undisputed by the Player that the Club paid the first installment. In addition, the FUR DRC recognized that the Club did not pay the fourth installment. The Club did not appeal against the Appealed Decision.

45. With respect to the second and the third installment in the total amount of RUB 1’725’000, the FUR DRC held that the Club proved the payment of these installments by submitting three bank payment orders. In his appeal, the Player contests receipt of the second and third installment. The Sole Arbitrator shall therefore decide if the Club is obliged to pay not only the fourth but also the second and third installment (i.e. an additional amount of RUB 1’725’000) to the Player.

B. Outstanding installments according to Article 7.4. of the Contract

46. The Sole Arbitrator notes that the Player refers to Article 24 of the FUR Regulations which provides as follows:

“4. The party is obliged to prove the circumstances which it refers to as a justification of its demands and objections”.

47. The Sole Arbitrator considers the distribution of the burden of proof outlined in the applicable FUR Regulations is congruent with general rules and principles and consistent with the wellestablished CAS jurisprudence: Facts pleaded have to be proven by the party who derives rights from these facts, 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 (CAS 2017/A/5277, para. 56). Hence, it is well established 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. In order to fulfil its burden of proof, a party must provide the Sole Arbitrator with all relevant evidence that it holds, and, with reference thereto, convince the Sole Arbitrator that the facts it pleads are true, accurate and produce the consequences envisaged by the party. If these requirements are complied with, the party has fulfilled its burden and the burden of proof is transferred to the other party.

48. To that effect, the Player bears the burden of proving the agreement between the Player and the Club regarding the amount owed of RUB 1’725’000 and that such payment is due. The Player submitted the Contract according to which the Player is entitled to the payments claimed (Article 7.4). Based on the documents on file, the Sole Arbitrator finds it established that the Player and the Club validly concluded the Contract. Article 7.4. of the Contract lines out clearly the Club’s obligation to pay four separate installments, each in the amount of RUB 862’500. The second installment became due on 1 March 2017. The third installment became due on 5 September 2017. Accordingly, the Player has proven that he is entitled to the second and third installments and that they are due.

49. The Sole Arbitrator therefore considers whether the Club provided evidence for the payment of the second and third installments.

50. In the Appealed Decision, the FUR DRC considered the following: The Club has proven the payment of the second and the third installments with three bank payment orders (No. 136 of 23 March 2017, No. 717 of 3 October 2017 and No. 41 of 20 February 2018; together the “Payment Orders”). From these Payment Orders, the FUR DRC concluded that the Club paid more than the agreed salaries for certain time periods. Further, the FUR DRC established that these alleged overpayments are considered set off with the second and third installments.

51. Based on the documents submitted by the Player in the proceeding before CAS, it is the overall impression of the Sole Arbitrator that the Club organized its salary payment procedures in an incomprehensive and non-transparent manner. These documents raise substantial doubts if the Club paid the second and third installments. In particular:

- The Sole Arbitrator notes that the presented Payment Orders contradict Article 4.1.1 of the Contract, which obligates the Club to pay the salary monthly, timely and in full to the Player. It appears from the Payment Orders that the Club paid the Player several monthly salaries in default of the Contract with delay. For example, the Club paid the salary for January 2017 together with the salary for June 2017 on 27 July 2017 (payment order No. 540). Further, it paid the salary for November and December 2017 only on 20 February 2018. In addition, the Club lined out the purpose of the payments in the Payment Orders unclearly and in a non-transparent way creating difficulties in tracking these payments.

- The alleged overpaid amounts noted in the Payment Orders do not match the amount of the second and third installments of a total amount of RUB 1’725’000 or a partial amount of RUB 862’500 each. Even if this alleged overpayment would be considered set off with the second and third instalments, a substantial amount of these installments remained unpaid.

- According to the Pay Slip, the Club itself accounted for an amount owed of RUB 3’335’988 by May 2018. This obviously included the second, third and fourth installments based on Article 7.4. of the Contract. In consequence, the Club stated in the Pay Slip that it owes the amount of RUB 3’385’198.36 by the end of May 2018.

- In essence, the Sole Arbitrator recognizes the increased evidential quality of the Pay Slip according to Russian labor law as credibly explained by the Player and uncontested by the Club.

52. In summary, it remains unclear which payments were made in which period for which obligation under the Contract. As an employer, the Club has all the pertinent evidence in its hand to prove all payments made to its employee and therefore provide an explanation for all payments that can be retraced and recalculated based on the Contract. The fact that the Club issued payments in an incomprehensible manner cannot be blamed on the Player. The Sole Arbitrator concludes that the Club failed to prove the payment of the second and third installments.

53. The Sole Arbitrator ordered the Club to provide full documentation regarding the payments made to the Player during his employment from June 2016 to June 2018, including all payment orders and all pay slips. The Club failed to produce this evidence without any excuse. In accordance with generally accepted principles of international arbitration (cf. para. 39 et seq. here above), the Sole Arbitrator infers that the full documentation regarding all payments made to the Player during his employment would be adverse to the interests of the Club, i.e. would show that the Club in fact did not pay the second, third and fourth installments according to Article 7.4. of the Contract.

54. According to the concept of burden of proof, the Club bears the risk if the payment of the amounts owed remains unproven. Therefore, the Sole Arbitrator concludes that the Club failed to prove the payment of the second and third installments. In conclusion, the Player is entitled to a payment in the amount of RUB 2’587’500 according to Article 7.4. of the Contract comprising the second, third and fourth installment. The appeal is therefore upheld and para. 5 of the Appealed Decision is set aside. The Club is obliged to pay RUB 2’587’500 (comprising the second, third and fourth installments of RUB 862’500 each) to the Player.