Besiktas JK v. Fédération Internationale de Football Association (FIFA), José Maria Gutierrez Hernandez

III. FACTUAL BACKGROUND — A. Background facts

6. Below is a summary of the main relevant facts, as established on the basis of the Parties’ written submissions on the file and relevant documentation produced in this appeal. Additional facts and allegations found in the Parties’ submissions may be set out, where relevant, in connection with the further legal discussion that follows. While the Sole Arbitrator has considered all the facts, allegations, legal arguments and evidence submitted by the Parties in the present proceedings, this Award refers only to the submissions and evidence considered necessary to explain its reasoning.

7. On 2 July 2018, Beşiktaş and the Coach signed an employment contract valid from 1 July 2018 until 30 June 2020 (the “Employment Contract”).

8. The Employment Contract contains, inter alia, the following relevant terms:

“ARTICLE 5 Salary and Bonuses

5.1. CLUB shall unconditionally pay COACH for each year contract a basic salary (net of Turkish taxes as specified in Article 5.5) of EUR 300,000.00 net of taxes as specified in article 5.5 and paid divided in 12 monthly equal instalments net of Turkish taxes to be paid within the last five (5) business days of each month. COACH commits to provide CLUB with the full bank account details of COACH’s account in Turkey or abroad, so CLUB can fulfill with his payment obligations in time. Every payment should be made by CLUB in Euros. The CLUB agrees to pay the COACH the following fees net of taxes as specified in article 5.5:

• EUR 14.400 net on 15 January 2019

• EUR 14.400 net on 15 January 2020

5.2. (…)

5.3. In addition to salary, bonuses and subsidies, CLUB shall pay a prepaid monthly rent support of EURO 3.000 to COACH.

5.4. (…)

5.5. The amounts to be paid under the present contract are net of taxes (including, but not limited to personal income tax, regional tax, municipal tax, or any other tax according to the legislation in force) and withholding tax. Therefore, CLUB will be responsible for any tax liability derived from the payments to be made to COACH pursuant to this Contract. CLUB would have to make corresponding gross up in order to pay COACH the net amount agreed. This clause is essential for the validity of the contract. For that reason, should the Turkish Tax Authorities request from COACH any amount as tax, withholding, surcharge, sanction, interest or any other tax liability, as a result of the payments arising from this contract, then the COACH shall be entitled to claim these amounts to CLUB. For the avoidance of doubts, should CLUB fail to pay the amounts agreed to COACH, COACH shall have the rights to claim such amount against CLUB and if necessary to initiate legal actions against CLUB. CLUB will provide each year with to COACH the tax residence certificate as well as the tax withholding certificate in order to comply with its tax obligations before the tax authorities. This clause constitutes an essential and determining factor of this Contract, without with it the present document would not have been executed by the Parties.

5.6. COACH will be entitled to terminate the contract if CLUB is in default of the payment in more than sixty (60) days and, under such circumstance, CLUB has not regularized the payments 15 days after COACH have put CLUB in default in writing. Should this occur, and pursuant to Article 17 of Regulations on the Status and Transfer of Players of the FIFA, COACH will be entitled to terminate the contract with a just cause reason and consequently CLUB shall pay COACH all the salaries and bonuses pending at the date of termination until 30 of June 2020 in accordance with Article 5. In case the COACH enters into a new employment relationship with a third club after such termination, the remuneration that will be received by the COACH from the third club until 30 June 2020 will be deducted from the total pending salary and bonus payments that will be paid by the CLUB to the COACH. In case of termination of the Contract, the Club’s Turkish tax obligation (as described in detail under clause 5.5) shall continue to be applicable for the payment of the pending salary and bonus payments. This clause constitutes an essential and determining factor of this Contract, without with it the present document would not have been executed by the Parties.

(…)

ARTICLE 9 Liabilities for Breach of Contract

1. If CLUB or COACH cancel (terminates) this contract prematurely without just case, or if COACH terminates this contract prematurely but with just case (unless just case emanates from a force major circumstances, e.g. Flood, earthquake, state of emergency or attempted coup etc.), pursuant to Article 17 of Regulations on the Status and Transfer of Players of the FIFA, the fulfilling party will be entitled to terminate the contract with a just cause reason and request the breaching the party the amount all the salaries and bonuses pending at the date of termination until 30 of June 2020 in accordance with Article 5. In case the COACH enters into a new employment relationship with a third club until 30 June 2020 will be deducted from the total pending salary and bonus payments that will be paid by the CLUB to the

COACH. In case of termination of the Contract, the Club’s Turkish tax obligation (as described in detail under clause 5.5) shall continue to be applicable for the payment of the pending salary and bonus payments.

As to the above amounts and method of payment the Parties declare as fair and just and therefore undertake not to dispute in front of any authority or to attempt to denounce or annul for no other reason other than those, and only those, mentioned in the present Contract.

This clause constitutes an essential and determining factor of this Contract, without with it the present document would not have been executed by the Parties” (underline in original).

9. On 12 February 2019, the Coach sent a default notice to the Club requesting payment of outstanding remuneration of net EUR 125,400.00 and granting 15 days to pay the outstanding amount.

10. On 7 May 2019, the Coach sent a second default notice to the Club requesting payment of outstanding remuneration of net EUR 112,000.00 and granted 15 days to pay the outstanding amount.

11. On 24 May 2019, the Coach sent a termination letter (the “Termination Letter”) to the Club whereby the Coach declared that he unilaterally terminated the Employment Contract with just cause. In the termination notice, the Coach held that the Club failed to pay him the total amount of EUR 126,400.00, corresponding to the monthly salaries of January 2019 until April 2019, as well as the amount of EUR 14,400.00 due on January 2019. In addition, the Coach requested the payment of EUR 406,400.00 corresponding to the compensation for the early termination of the Employment Contract with just cause.

B. Proceeding before the FIFA Players’ Status Committee

12. On 29 July 2019, the Coach filed a claim against the Club in front of FIFA Players’ Status Committee (the “FIFA PSC”) requesting the following:

• EUR 129,400.00 as outstanding remuneration, plus 5% interest p.a.:

• EUR 3,000.00 corresponding to rent support for January 2019 (interest as from 1 January 2019);

• EUR 14,400.00 corresponding to the instalment due on 15 January 2019 (interest as from 15 January 2019);

• EUR 25,000.00 corresponding to the January 2019 salary (interest as from 1 February 2019);

• EUR 3,000.00 corresponding to rent support for February 2019 (interest as from 1 February 2019);

• EUR 25,000.00 corresponding to the February 2019 salary (interest as from 1 March 2019);

• EUR 3,000.00 corresponding to rent support for March 2019 (interest as from 1 March 2019);

• EUR 25,000 corresponding to the March 2019 salary (interest as from 1 April 2019);

• EUR 3,000.00 corresponding to rent support for April 2019 (interest as from 1 April 2019);

• EUR 25,000.00 corresponding to the April 2019 salary (interest as from 1 May 2019); and

• EUR 3,000.00 corresponding to rent support for May 2019 (interest as from 1 May 2019).

• EUR 403,400.00 as compensation for breach of contract, plus 5% interest p.a. as from 25 May 2019.

• The Coach also requested that the Club bear all the costs of the proceedings.

13. On 7 October 2019, in its response submitted before the FIFA PSC, the Club argued that on 12 July 2019 it paid the Coach EUR 149,331.14, corresponding to his salary between January and June 2019 (equal to EUR 150,000) minus EUR 668.86, which “reflects the total expenses incurred by the [Club] on behalf of the [Coach]”. Furthermore, the Club held that on the same day (i.e. 12 July 2019), it also paid in favour of the Coach the sum of EUR 14,400.00, corresponding to the instalment due on 15 January 2019, and the sum of EUR 15,000.00 reflecting the monthly rent support of the Coach between January 2019 and May 2019.

14. In support of the above, the Club submitted Turkish bank statements explaining that it “was unable to translate these documents in time”. Consequently, the Club requested the FIFA PSC: (i) to “decline the request of the [Coach] for overdue amount of 129,400 EUR as well as the accrued interest”; (ii) to “decline the request of the [Coach] for compensation of 403,400 EUR”; (iii) in case the request under point (ii) is rejected to “establish that the maximum base compensation to be payable by the [Club] to the [Coach] by at least 50% as a result of the termination of the Employment Contract by the [Coach], taking into consideration the failure of the [Coach] to mitigate his damages, although he had reasonable time to do so”; and (iv) to “order the [Coach] to pay the legal costs and all other expenses of the present proceedings”.

15. On 10 December 2019, the Coach informed the FIFA PSC that he concluded an employment agreement with the Spanish club UD Almeria S.A.D., valid from 5 November 2019 until 30 June 2020. In accordance with said document, the Coach is entitled to 8 monthly instalments of EUR 18,750.00.

16. On 22 January 2019, the FIFA PSC rendered its decision with the following operative part (the “Appealed Decision”):

“1. The claim of the [Coach], José María Gutiérrez Hernández, is partially accepted.

2. The [Club], Besiktas J.K., has to pay to the [Coach], within 30 days as from the date of notification of the present decision, outstanding remuneration in the amount of EUR 129,400, plus interest at the rate of 5% p.a. until the date of effective payment, as follows:

a) From 1 January 2019, on the amount of EUR 3,000; b) From 16 January 2019, on the amount of EUR 14,400; c) From 1 February 2019, on the amount of EUR 28,000; d) From 1 March 2019, on the amount of EUR 28,000; e) From 1 April 2019, on the amount of EUR 28,000; f) From 1 May 2019, on the amount of EUR 28,000.

3. The [Club] has to pay to the [Coach] within 30 days as from the date of notification of the present decision, compensation for breach of contract in the amount of EUR 256,400 plus 5% interest p.a. on said amount as from 29 July 2019 until the date of effective payment.

(…)

6. The final costs of the proceedings in the amount of CHF 25,000 are to be paid by the [Club], Besiktas J.K., as follows: 6.1 The amount of CHF 20,000 has to be paid to FIFA (…). 6.2 The amount of CHF 5,000 has to be paid directly to the Claimant.

(…)” (emphasis in original).

17. On 8 April 2020, the grounds of the Appealed Decision were communicated to the Parties determining, inter alia, the following:

- The FIFA PSC acknowledged that on 2 July 2018 the Coach and the Club signed an Employment Contract valid from 1 July 2018 until 30 June 2019, pursuant to which the Club undertook to pay to the Coach the amounts as stipulated in the Employment Contract.

- In particular, the FIFA PSC recalled the content of Article 5.6 of the Employment Contract, which stipulates that the Coach “will be entitled to terminate the contract if the Club is in default of the payment in more than sixty (60) days and [the Club] has not regularized the payments 15 days after Coach have put Club in default writing. Should this occur, [the] Coach will be entitled to terminate the contract with a just cause […]”.

- In addition, the FIFA PSC further acknowledged that the Coach put the Club in default of payment twice, granting it 15 days to cure it.

- The FIFA PSC also noted that the Coach unilaterally terminated the Employment Contract on 24 May 2019, “invoking the non-payment of 4 monthly salaries as well as the amount of EUR 14,400”.

- Consequently, when the Coach terminated the Employment Contract “four monthly salaries and four monthly rent support were outstanding in favour of the Coach, which is considerably more then the 60 days as set out in Art. 5.6 of the contract”.

- Therefore, the FIFA PSC established that the Club had to be held liable for the early termination of the Employment Contract. The FIFA PSC decided that the Club “must pay to the [Coach] interest of 5% p.a. on the amount of EUR 129,400 as from the due dates until the effective date of payment”. As a consequence, the FIFA PSC considered that the amount of EUR 668.86 should not be taken into account since “no contractual basis or any other form of evidence justified the deduction of said amount from the outstanding remuneration due to the [Coach]”.

- Furthermore, with regard to the compensation payable by the Club to the Coach following the termination with just cause by the latter, the FIFA PSC determined that said amount “had to be assessed on the basis of the residual value of the contract in line with the jurisprudence of the Players’ Status Committee”, which is equal to EUR 406,400.00. However, the FIFA PSC took note that the Coach “had concluded a new employment contract with the Spanish Club UD Almeria S.A.D., valid as from 5 November 2019 until 30 June 2020, according to which he was entitled to eight monthly instalments of EUR 18,750”.

- In light of the above, the FIFA PSC “concluded that the amount of EUR 256,400 is to be paid by the Club to the Coach as compensation for breach of contract”.

- Lastly, the FIFA PSC ordered the Club to pay the costs of the proceeding in front of FIFA amounting to EUR 25,000.00.

IV. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

18. On 30 April 2020, the Club filed a Statement of Appeal with the Court of Arbitration for Sport (“CAS”) in accordance with Article 58 of the FIFA Statutes and Articles R47 and R48 of the Code of Sports-related Arbitration (2019 edition) (the “CAS Code”). Furthermore, the Club requested that the appeal be decided by a Sole Arbitrator and selected English as the language of the present proceedings.

19. On 1 May 2020, the First Respondent informed the CAS that he agreed to submit the dispute to a Sole Arbitrator as well as to accept English as the language of the proceedings.

20. On 4 May 2020, the Second Respondent requested to be excluded as a respondent in this proceeding.

21. On 8 May 2020, the Appellant replied that “the present appeal is also brought against FIFA as Second Respondent for reimbursement of the procedural costs paid to FIFA by the Appellant to obtain the grounds of the appealed decision” and therefore maintained its claim against the Second Respondent.

22. On 12 May 2020, the Second Respondent informed the CAS that it agreed to submit the present procedure to a Sole Arbitrator and to conduct this proceeding in English. Furthermore, on the same date, the Second Respondent asked the Appellant to reconsider the Second Respondent’s request to be excluded as a respondent, with no success.

23. On 22 May 2020, the Club filed its Appeal Brief pursuant to Article R51 of the CAS Code.

24. On 29 May 2020, the First Respondent requested that the time limit to file its Answer to the Appel Brief be fixed after the payment by the Appellant of its share of the advance of costs, further to Article R55 of the CAS Code.

25. On 2 June 2020, the Second Respondent also requested that the time limit to file its Answer to the Appeal Brief be fixed once the Appellant had paid its share of the advance of costs, further to Article R55 of the CAS Code.

26. On 4 June 2020, CAS informed the Respondents that the Club paid the advance costs and reset the Respondents’ Answer deadlines.

27. On 8 June 2020, the Parties were informed in accordance with Article R54 of the CAS Code and on behalf of the Deputy President of the CAS Appeals Arbitration Division, that the Sole Arbitrator had been constituted as follows:

Sole Arbitrator: Mr Cesare Gabasio, Attorney-at-Law in Turin, Italy

28. On 12 June 2020, the Second Respondent filed its Answer to the Appeal Brief pursuant to Article R55 of the CAS Code.

29. On 27 July 2020, after several extensions, the First Respondent filed its Answer to the Appeal Brief pursuant to Article R55 of the CAS Code.

30. On 8 August 2020, the Parties were informed that the Sole Arbitrator had considered the Parties’ preference that the Award be issued on the basis of their written submissions, without holding a hearing, and had deemed himself sufficiently well-informed to issue the Award on the basis of the Parties’ written submissions, further to Article R57 of the CAS Code.

31. On 28 August 2020, the Appellant submitted the duly signed Order of Procedure to the CAS Court Office.

32. On 31 August 2020, both Respondents submitted the duly signed Order of Procedure to the CAS Court Office.

33. On 11 February 2021, Mr Koray Akalp informed the CAS Court Office that he was no longer acting as the representative of the Appellant.

V. PARTIES’ SUBMISSIONS

34. The Appellant’s submission, in essence, may be summarised as follows:

- The Club is not arguing whether the termination of the Employment Contract by the Coach was with just cause or not, but is contesting the amount due to the First Respondent as outstanding remuneration and as compensation for breach of contract. With regard to the outstanding remuneration, the Club argues that such amount was paid to the Coach “before the claim [in front of PSC] was even launched”. On the other hand, as far as the compensation for breach of contract is concerned, the Club (i) claims that such compensation is not due and, secondarily (ii) claims that the calculation of the residual value of the Employment Contract made by the FIFA PSC in the Appealed Decision is wrong and that the monthly rent support in favour of the Coach, for the term after the termination of the Employment Contract, should not be taken into consideration when calculating the residual value of the contract.

- Furthermore, the Club requests CAS to order the Respondents to reimburse the procedural costs incurred by the Appellant before the FIFA PSC since the First Respondent did not inform the FIFA PSC about the receipt of the payment of the outstanding remuneration and the Second Respondent did not take into consideration the untranslated document proving the payment of said outstanding remuneration.

35. The Appellant submitted the following requests for relief:

a. “To accept the present appeal against the decision of the Single Judge of the Players’ Status Committee dated 22 January 2020;

b. To set aside the decision of the Single Judge of the Players’ Status Committee dated 22 January 2020;

c. To establish that the Appellant does not have to pay EUR 129.400. – as outstanding remuneration to the First Respondent.

d. To establish that the Appellant does not have to pay compensation to the First Respondent for breach of contract.

e. To condemn the First Respondent to pay the Appellant EUR 4,700 as reimbursement of the procedural costs incurred before FIFA Players’ Status Committee.

f. To condemn the Second Respondent to pay the Appellant CHF 20,000 as reimbursement of the procedural costs incurred before FIFA Players’ Status Committee.

g. To jointly condemn the Respondents to the payment of CHF 10.000 in the favour of the Player of the legal expenses incurred,

h. To establish that the costs of the arbitration procedure shall be borne jointly by the Respondents.

Alternatively, in case the above request is not accepted,

a. To accept the present appeal against the decision of the Single Judge of the Players’ Status Committee dated 22 January 2020;

b. To set aside the decision of the Single Judge of the Players’ Status Committee dated 22 January 2020;

c. To establish that the Appellant does not have to pay EUR 129.400. – as outstanding remuneration to the First Respondent.

d. To establish that the total compensation payable by the Appellant to the First Respondent for breach of contract shall be maximum EUR 164.400.

e. To condemn the First Respondent to pay the Appellant EUR 4,700 as reimbursement of the procedural costs incurred before FIFA Players’ Status Committee.

f. To condemn the Second Respondent to pay the Appellant CHF 20,000 as reimbursement of the procedural costs incurred before FIFA Players’ Status Committee.

g. To jointly condemn the Respondents to the payment of CHF 10.000 in the favour of the Player of the legal expenses incurred,

h. To establish that the costs of the arbitration procedure shall be borne jointly by the Respondents”.

36. The submissions of the First Respondent may be summarized as follows:

- As to the outstanding remuneration, the Coach recognizes the payment of EUR 178,731.14 made by the Club on 12 July 2019. He also recognizes that all costs incurred by the Club on behalf of the Coach, amounting to EUR 668.86, were correctly deducted.

- Regarding the amount of compensation due for the premature termination of the Employment Contract, the First Respondent requests the CAS to take into consideration the “prepaid monthly rent support” of EUR 3,000.00 when calculating the total compensation, pursuant to Article 5 and Article 9 of the Employment Contract.

- Finally, the Coach states that no reimbursement of procedural costs shall be granted to the Club since “The Coach has always acted in good faith when filing the claim and only noticed the payments made by the Besiktas at a later stage. In any event and after having paid, Besiktas (i) never notified the Coach about this payment, (ii) the coach was never requested to confirm whether or not such payments were made and, (iii) despite its means and experience in previous litigations, it was Besiktas who failed to provide the FIFA PSC with the corresponding translations into one of the four FIFA official languages, breaching the FIFA Procedural Rules”.

37. The First Respondent submitted the following requests for relief:

A. “To partially upheld [sic] the appeal filed by the Besiktas and consider the payments made after the termination of the Employment Agreement that has been recognized by the First Respondent, solely for the purpose of amortization of the total debt existent, amending the FIFA PSC Decision only as to the amount of the outstanding (III. 2 of the Decision) and compensation (III.3. of the Decision) as follows:

A.1) The Appellant has to pay to the First Respondent, the outstanding net sum of TWO THOUSAND TWO HUNDRED FORTY EUROS AND EIGHT-FIVE CENTS (2,240.85 EUR) corresponding to the interests for late payment (see par. 17 above);

A.2) The Appellant shall pay the First Respondent compensation for breach of contract in the net amount of TWO HUNDRED THREE THOUSAND FOUR HUNDRED EUROS (203,400.00 EUR) as well as 5% interest per annum on said amount from July 29th, 2019, until the full payment;

B. In any case, ordering BESIKTAS to pay the costs and other expenses of this arbitration.

C. In any case, ordering BESIKTAS to pay the legal fees and other expenses incurred by the Coach in an amount to be determined at the discretion of this Hon. Sole Arbitrator and no less than CHF 7,000.00”.

38. The submissions of the Second Respondent may be summarized as follows:

- The dispute in the case-at-hand is of a so-called horizontal nature (i.e. exclusively between the Club and the Coach) and, therefore, FIFA has no standing to be sued. Furthermore, FIFA states that the Appellant’s claim for procedural costs also fails on the merits for the following reasons: (i) the Club has not complied with the procedural rules set forth by FIFA by not submitting the translation of the bank statement in one of the four official languages of FIFA; (ii) the FIFA PSC would have charged the full procedural costs to the Appellant even if it had taken into account the Appellant’s payment of outstanding salaries to the Coach made on 12 July 2019; (iii) the Club would in any case have asked for the grounds of the Appealed Decision and, thus, paid the procedural costs since the Appellant also wished to challenge the compensation for breach of contract; and (iv) there were no contradictions in the FIFA PSC’s evaluation of untranslated evidence produced by the Club.

39. The Second Respondent submitted the following requests for relief:

(a) “rejecting the reliefs sought by the Appellant; (b) confirming the Appealed Decision; (c) ordering the Appellant to bear the full costs of these arbitration proceedings; and

(d) ordering the Appellant to make a contribution to FIFA’s legal costs”.