Besiktas JK v. Jeremain Marciano Lens

II. FACTUAL BACKGROUND

4. Below is a summary of the main relevant facts, as established on the basis of the written submissions of the Parties, and the evidence examined in the course of the proceedings. This background information is given for the sole purpose of providing a synopsis of the matter in dispute. Additional facts may be set out, where relevant, in connection with the legal discussion.

A. Background Facts

5. On 8 August 2017, the Parties concluded an employment contract (the “Employment Agreement” or the “Contract”) valid from the date of signature until 31 May 2018. According to a Temporary Transfer Agreement, previously signed between the Player, the Club and Sunderland F.C., the Club later exercised its purchase option of the Player’s economical and federative rights. Therefore, the Contract was extended until 31 May 2022.

6. According to Article 6.A of the Contract, the Parties agreed the following seasonal salaries (“The Guaranteed Salary of the Player”):

a) Season 2017/2018: total remuneration of EUR 2,200,000 net, payable in 10 instalments of EUR 220,000 each, due by the last day of each month as from August 2017 until May 2018;

b) Season 2018/2019: total remuneration of EUR 2,250,000 net, payable in 10 instalments of EUR 225,000 each, due by the last day of each month as from August 2018 until May 2019;

c) Season 2019/2020: total remuneration of EUR 2,300,000 net, payable in 10 instalments of EUR 230,000 each, due by the last day of each month as from August 2019 until May 2020;

d) Season 2020/2021: total remuneration of EUR 1,950,000 net, payable in 10 instalments of EUR 195,000 each, due by the last day of each month as from August 2020 until May 2021;

e) Season 2021/2022: total remuneration of EUR 1,800,000 net, payable in 10 instalments of EUR 180,000 each, due by the last day of each month as from August 2017 until May 2018.

7. On the same date, i.e. 8 August 2017, the Parties also signed an Image Rights Agreement (the “Agreement for the Licensing of Image Rights”) by means of which the Player granted the Club a non-exclusive license for the use of his image rights, in consideration of an additional remuneration as follows:

a) Season 2017/2018: total remuneration of EUR 400,000 net, payable in two instalments of EUR 200,000 each, due on 30 September 2017 and on 15 February 2018;

b) Season 2018/2019: total remuneration of EUR 350,000 net, payable in two instalments of EUR 175,000 each, due on 30 September 2018 and on 15 February 2019;

c) Season 2019/2020: total remuneration of EUR 300,000 net, payable in two instalments of EUR 150,000 each, due on 30 September 2019 and on 15 February 2020.

8. On 11 March 2020, the World Health Organization (the “WHO”) declared the COVID 19 disease a pandemic.

9. On 19 March 2020, the Turkish Football Federation decided to suspend all leagues and cup competitions until further notice.

10. On 12 June 2020, the TFF resumed all the championships of the professional football leagues to complete the respective seasons.

11. On 29 June 2020, the Club sent the Player a draft of a settlement agreement containing the following provision:

“The Player explicitly and irrevocably agrees and accepts that, out of his total entitlement of 780.000 EUR as guaranteed salary and image rights payments for the months March, April and May 2020, he waives his entitlement to 390.000EUR which corresponds to half of his remuneration arising from the [employment contract and the image rights agreement] for the months March, April and May 2020. Furthermore, the Player explicitly agrees and accepts that the remaining part of 345.000 EUR for the months March, April and May 2020 will be paid by the Club to the Player on 31 October 2020”.

The settlement agreement was not signed either by the Club nor by the Player.

12. On 26 August 2020, the Player put the Club in default for the first time and granted it a tenday deadline to proceed with the payment of EUR 346,576 regarding his outstanding remuneration for the season 2019/2020, stating the following:

“Pursuant to the aforementioned Contract and the Agreement for Licensing of Image Rights dated 08.08.2017 […] until the date of issuance of this written notification and in relation to the football season of 2019/2020, the Notified Party (i.e., the Club) has not yet paid 346.576,00 Euro net in total of due and payable receivables of the Notifying Party (The Player) without prejudice to rights of request and claim with respect to the surplus”.

13. On 3 September 2020, the Club replied that, due to the COVID-19 pandemic, it suffered a severe economic and financial disruption that caused a considerable loss of income. Since the Player refused to reduce his unpaid salaries as proposed, the Club stated that it had no other chance than to apply a unilateral deduction on all the employees’ remuneration equal to 15% of their total due remuneration for the 2019/2020 season, variation to be applied on March, April and May 2020 salaries. Therefore, the Club concluded:

“Considering that Mr Lens’s total salary for the 2019/2020 season according to the Employment Contract he signed with our Club was 2.300.000 EUR and an additional image rights fee of 300.000 EUR was agreed for the 2019/2020 season (pursuant to Agreement for the Licensing of the Image Rights), 15% of the total amount of 2.600.000 EUR which equals to 390.000 EUR was deducted from Mr Lens’s salaries from our Club for the months of March, April and May 2020. […] Consequently, after application of the above mentioned deduction due to COVID-19, according to our accounting records, the only remaining remuneration of Mr Lens from 2019/2020 season is 100.000 EUR individual bonus with the due date of 31 July 2020, which will be paid by our Club in the following days”.

14. On 5 February 2021, according to Article 12bis of the FIFA Regulations on the Status and Transfer of Players (the “FIFA RSTP”), the legal representative of the Player sent a second default notice (“Notification for the overdue payables of the Notifying Party”) claiming the following:

“2. We would like to state that the Notified Party (The Club) has not yet paid 390.000,00 Euro [..] of the due and payable receivables of the Notifying Party (The Player) in relation with the football season 2019/2020[…]”.

Eventually, the Player granted the Club a ten-day deadline to pay him the due outstanding remuneration from the season 2019/2020.

15. On 15 February 2021, the Club replied to the default notice affirming that the pandemic deeply affected its financial means and business planning and severely reduced all the revenues, including ticket selling, broadcasting, and sponsorships. All the while, the Club could not recover the majority of its incomes previously anticipated. Despite this unexpected event, the Club followed the FIFA’s guidelines regarding the pandemic and stated that it acted in good faith, offering a settlement agreement to all the players and technical staff to minimize its financial damages, avoiding any excessive hardship in fulfilling its obligations towards the employees: “In order to guarantee our activities and financial survivability, we decided to apply a deduction on remunerations of all players (including your client) that was equal to %15 of the total remuneration due to each player and technical staff for the 2019/2020 season and this deduction was applied to salaries and other payables of each player and technical staff accordingly.

This mitigation of the remuneration, which is mandatory for our Club to continue its activities, is applied equally to all members of our Club and importance was given to make sure that each player and technical staff faces minimum damages. Consequently, after application of the above mentioned 15% deduction due to Covid-19, according to our accounting records, your client Mr Jeremain Marcian Lens have been paid all payables arising from the Employment Contract and Agreement for the Licensing of the Image Rights for the related period […]”.

B. Proceedings before the FIFA Dispute Resolution Chamber

16. On 18 February 2021, the Player filed a claim against the Club before the FIFA Dispute Resolution Chamber (the “FIFA DRC”), stating that the 15% deduction operated by the Club was unlawful and unjustified and requested the total amount of EUR 390,000 net p lus 5% interests p.a. as from the due dates: i.e. EUR 160,000 net as the payment of April 2020 and EUR 230,000 net as the payment of May 2020.

17. The Club replied that the pandemic created a force majeure situation in Turkey, disrupting everyday life as well as football in general and submitted that:

a) the Player did not attend any training session and matches during the period of suspension, as well as the football season was suspended on 19 March 2020 and only resumed on 12 June 2020. Accordingly, the player “did not submit any form of

documentary evidence to support that he played football for the Respondent and he attend the training sessions and training camps during the COVID-19 pandemics”;

b) according to Articles 136, 137 and 138 of the Turkish Code of Obligations, exceptional situations, such as a pandemic, can cause the impossibility of complying with the contractual obligations without any consequence for the debtor. Accordingly, in other quoted cases, the Turkish Courts already allowed a reduction of up to 50% of the unpaid amounts.

c) the doctrine of clausula rebus sic stantibus should also apply to the case at hand as an exception to the principle of pacta sunt servanda.

d) The majority of the A-Team’s players accepted the settlement agreements proposed by the Club to recover the 85% decrease in the Club’s cash flow.

18. In his rejoinder, the Player stated that there was no valid reason to accept the Club’s unilateral deduction and that the amount of EUR 390,000 was still unpaid and overdue. Moreover, the Player played all the season’s matches until the end, namely on 26 July 2020, attending all the training sessions and other contractual due activities. The Player observed that Turkish Labour Courts decided that COVID-19 was not a valid reason to make a unilateral deduction of the players’ salaries contrary to the Club’s submissions. At least, FIFA DRC’s previous decisions only allowed a reduction for the relevant months, i.e., March, April and May 2020. Not most of the Players signed the settlement agreement, mainly the U-19 squad players. Therefore, the Player maintained his payment request.

19. The Club briefly replied that the FIFA Chambers already recognised COVID 19 as a force majeure situation, thus allowing the unilateral reduction of the Player’s salaries. Furthermore, contrary to the Appellant, Turkish Labour Law was not applicable to athletes as the “procedure involving national players is different than the one regarding foreigners”.

20. On 12 August 2021, the FIFA DRC rendered its decision (the “Appealed Decision”), with the following operative part:

“1. The claim of the Claimant, Jeremain Marciano Lens, is partially accepted.

2. The Respondent, Beşiktaş Futbol, has to pay to the Claimant, the following amount:

- EUR 160,000 net as outstanding remuneration plus 5% interest p.a. as from 1 May 2020 until the date of effective payment, and

- EUR 230,000 net as outstanding remuneration plu 5% interest p.a. as from 1 June 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

[…]

5. Pursuant to article 24bis of the Regulations on the Status and Transfer of Players if full payment (including all applicable interest) is not paid within 45 days of notification of this decision, the following consequences shall apply:

1. The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid. The maximum duration of three entire and consecutive registration periods.

2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee in the event that full payment (including all applicable interest) is still not paid by the end of the of the three entire and consecutive registration periods”.

21. On 3 September 2021, the grounds of the Appealed Decision were communicated to the Parties, providing, inter alia, as follows:

➢ “[…] the Dispute Resolution Chamber […] first took note that the present matter was presented to FIFA on 18 February 2021 and submitted for decision on 12 August 2021. Taking into account the wording of art. 21 of the January 2021 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

➢ Subsequently, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Player (edition February 2021), said edition (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

➢ The Chamber […] took note of the fact that the player lodged this claim against the club seeking payment of his remuneration from April and May 2020 – and- the club referred to the COVID pandemic and claimed that (i) there was, at the time, an existing situation of force majeure in Turkey; and (ii) the player’s entitlements for the whole 2019/2020 season were validly reduced b y 15% in accordance with the pertinent regulations.

➢ […] the Chamber firstly wished to recall that FIFA issued a set of guidelines, the COVID -19 Guidelines, which aim at providing appropriate guidance and recommendations to member associations and their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19 and ensure that any response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

➢ […] said guidelines – as per the explicit wording of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines – are only applicable to “unilateral variations to existing employment agreements”. Therefore, except where a termination of a contract occurred following a unilateral variation made as a result of COVID-19 (in which case the validity of the variation must first be

assessed under the guidelines), said guidelines do not apply to assess unilateral terminations of existing employment agreements. The Chamber further noted that for the assessment of dispute that are presented before the FIFA judicial bodies concerning the unilateral termination of a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber shall apply.

➢ In other words, in any given dispute, it is for a party invoking force majeure to establish the existence of said event under the applicable law/rules as well as the consequences that derive in connection thereto […] in application of said FIFA COVID 19 Guidelines, unilateral decisions to vary agreements will only be recognised where they are made in accordance with national law or are permissible within collective bargained agreements (CBA) structures or another collective agreement mechanism.

➢ […] the Chamber noted that the club referred to the Turkish Code of Obligations and t o the jurisprudence of the Turkish ordinary courts related to effects of the pandemic over contracts. Conversely […] the DRC also took due note […] that the labour courts had an opposite understanding regarding the possibility of unilaterally reducing a player’s remuneration.

➢ In view of this dissent between the parties and after carefully analysing their submissions, the DRC unanimously decided that the documentation on file was not sufficient to prove a legal situation of force majeure entitling the club to unilaterally vary the terms of the employment contract under the national law. Equally, the members of the Chamber deemed that the club could not establish to a comfortable satisfaction degree that the reduction of a player’s (or any employee’s) remuneration was authorized (or even addressed) by the national law.

➢ The DRC […] noted that the Turkish league was suspended for two months only while the club reduced the player’s salary for the entire 2019/2020 season and in a retroactive manner, which could not be deemed neither reasonable nor proportionate.

➢ As a consequence, and in light with the DRC’s jurisprudence, the DRC decided that the club failed to demonstrate that the unilateral variation of the contract was licit, entailing that on the basis of the principle pacta sunt servanda it should have paid the player’s agreed remuneration.

➢ […] the Chamber decided to award the player interest at the rate of 5% p.a. on the outstanding amounts as from one day after their due dates until the date of effective payment.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

22. On 20 September 2021, the Club filed a Statement of Appeal with the Court of Arbitration for Sport (“CAS”) against the Appealed Decision, in accordance with Articles R47 and R48 of the 2019 edition of the CAS Code of Sports-related Arbitration (the “CAS Code”). In its submission, the Club requested that a Sole Arbitrator be appointed according to Article R50 (1) of the CAS Code.

23. On 23 September 2021, the Player informed the CAS Court Office that he disagreed with the appointment of a Sole Arbitrator.

24. On 2 October 2021, the Club filed its Appeal Brief in accordance with Article R51 CAS Code.

25. On 4 October 2021, the CAS Court Office informed the Parties that the Deputy Division President decided to refer the matter to a Sole Arbitrator.

26. On 4 October 2021, FIFA informed the CAS Court Office that it renounced intervening in the ongoing proceedings between the Club and the Player.

27. On 11 November 2021, the Player filed his Answer in accordance with Article R55 CAS Code. On the same date, he communicated to the CAS Court Office that he preferred the Sole Arbitrator to issue an award based solely on the Parties’ written submissions.

28. On 12 November 2021, in accordance with Article R54 CAS Code, and on behalf of the Deputy President of the CAS Appeals Arbitration Division, the CAS Court Office informed the Parties that the Arbitral Tribunal appointed to decide the present matter would be constituted as follows:

➢ Sole Arbitrator: Mr Francesco Macrì, Attorney-at-Law in Piacenza, Italy.

29. On 16 November 2021, the Appellant agreed that the Sole Arbitrator to issue the award in the present matter based only on the Parties’ written submission. By the same communication, the Club requested the Sole Arbitrator to stay these proceedings, pending a decision in case CAS 2021/A/7872, allegedly based on the same legal grounds. On the same date, the Respondent replied, objecting to the requested suspension.

30. On 13 December 2021, the CAS Court Office informed the Parties that the Sole Arbitrator rejected the Appellant’s request to stay the proceedings. He deemed himself well-informed to decide the case based solely on the Parties’ written submissions.

31. On 13 December 2021, with separate communication, the CAS Court Office provided the Parties with an Order of Procedure, duly signed and returned by the Club and the Player on 14 December 2021.

32. On 28 January 2022, the CAS Court Office informed the Parties that, being part of the jurisprudence of the CAS, the Sole Arbitrator admitted the Award CAS 2021/A/7872 into the file provided by the Appellant with its unsolicited letter dated 13 December 2021.

33. The Sole Arbitrator confirms that it carefully heard and took into account in its decision all the submissions, evidence, and arguments presented by the Parties, even if they have not explicitly been summarised or referred to in the present arbitral award.

IV. SUBMISSIONS OF THE PARTIES AND REQUESTS FOR RELIEF — A. The Appellant

34. The Club’s submissions, in essence, may be summarised as follows:

➢ The COVID-19 pandemic severely impacted the world football system, affecting all the Clubs’ financial planning, and causing a remarkable decrease in its revenues, including, but not limited to, the incomes from broadcasters, sponsorships, and daily and seasonal ticketing. Turkey’s situation worsened since the TFF decided to suspend all the national championships on 15 March 2020.

➢ In addition to this negative framework, the abovementioned prejudicial situation still maintained its negative financial impacts during the 2020/2021 season since all the matches were still being played behind closed doors, thus depriving the Club of its match day revenues.

➢ Despite the Club having no fault or negligence in finding itself in this financial disruption, it became impossible to fully comply with its obligations stipulated under the employment agreement signed with players, technical staff and other employees.

➢ Therefore, the Club’s representatives started several negotiations with all its employees, trying to mitigate the damages caused by the pandemic and offering a general deduction of the salaries for the 2019/2020 season up to 15% for each employee. This proposal was accepted by the majority of the Club’s A-Team players and the technical staff, excluding the Respondent, who firstly sent a default notice and then filed a claim before the FIFA DRC.

➢ According to the FIFA’s instructions, the Club acted in good faith, particularly to FIFA Circular Letter n. 1714, and the proposed reduction was EUR 390,000, which corresponded to 15% of his total remuneration. The proposal was even more valuable since the Club paid the Player a salary of more than 10,000,000 Euros during the employment relationship.

➢ In summary, the Club acted lawfully and reasonably since (i) it tried to reach a concrete and amicable solution with the Player, (ii) it suffered a loss of income equal to 85% due to the pandemic, and the remuneration’s deduction became necessary, (iii) such deduction of the Player’s salary was equal to 15% where its loss was 85% of the total revenues, (iv) despite the economic and financial hardships, it corresponded to the Player more than one million euro during the 2019/2020 season, (v) it applied the same proportional reduction to all the employees, namely the players and the coaches.

➢ The Club fulfilled all its responsibilities as determined by the FIFA Covid-19 guidelines. Due to the unexpected situation caused by the pandemic, the players’ protections under Articles 12bis, 14 and 14bis of the FIFA RSTP shall not fully apply.

➢ The UEFA Executive Committee introduced additional emergency measures to obtain the license for the clubs participating in the UEFA competitions in the 2021/2022 season, notably amending the consequences of failing to satisfy Articles 50 and 51 provisions (Club licensing and Financial Fair Play Regulations). Therefore, an aggregate amount of overdue payables of no greater than 15% had to be tolerated in

granting the requested license. Once again, the Club’s attitude was in line with the guidelines also provided by UEFA.

➢ The Player did not fulfill its obligations pursuant to Article 5 of the Employment Contract. It is undeniable that he did not train or play during the pandemic; what is more, as a consequence, the Club is not bound to fulfil its obligations towards the Player.

➢ Articles 136, 137 and 138 of the Turkish Code of Obligations regulate the impossibility of performance of contractual obligations in exceptional situations and, hence, shall be taken into consideration to address the effects of the pandemic. In this respect, some jurisprudence of the Turkish Courts related to the COVID’s impacts on contracts and the recognition of the force majeure situation acknowledged the need to review the previous agreed contractual conditions. The Club claimed that “it would be fair to state that any and all instances of Turkish Courts considered the Covid-19 pandemic as force majeure event and allowed a 50% reduction” of the monthly payables.

➢ In addition to the above, the doctrine of clausula rebus sic stantibus should also apply to the case at hand as an exception to the principle of pacta sunt servanda, since the circumstances at the time of the signature of the employment contract allegedly changed “in an unforeseeable manner and to a material extend which made performance impossible”. In a decision dated 29 September 2020, a Judge of FIFA DRC recognized that the spread of the COVID19 pandemic should trigger the application of the force majeure clause stipulated between the parties to allow the reduction of that player’s salary.

➢ The FIFA DRC also ruled in another case concerning the Club, validating its unilateral reduction of 15% of the salaries due to that player for March, April, and May 2020 (CAS 2021/A/7872). The Club appealed the FIFA DRC decision before CAS: consequently, the Sole Arbitrator shall stay these proceedings CAS 2021/A/8319 until the issuing of the final decision in the case described above, i.e., CAS 2021/A/7872, to avoid a violation of Article 190 of PILA.

➢ On this basis, the Club submitted the following prayers for relief in its Appeal Brief:

I. Set aside the Decision under Appeal;

II. Render a new decision (replacing the FIFA DRC decision) and apply a reduction of 390,000 EUR on the annual salary which is equal to 15% of the Respondent’s total salary for the season 2019/2020;

III. Alternatively to “II” above; render a new decision (replacing the FIFA DRC Decision) determining that the Appellant validly applied a reduction of 390.000 EUR on the annual salary which is equal to 15% of the Respondent’s total salary for the season 2019/2020;

IV. Alternatively to “I” and “II” above; render a new decision (replacing the FIFA DRC decision) determining that the Respondent has to refund 390.000 EUR and a 5% interest p.a. to accrue from the date of transfer by the Appellant;

VIII. THE APPELLANT’S REQUEST FOR SUSPENSION OF THE PROCEEDINGS

47. As abovementioned in paragraph 28, the Club filed a request to suspend these proceedings until the appointed Panel would have issued a decision in the procedure registered under CAS

48. The Club argued that such a case concerned a unilateral deduction of that player’s salaries, applied on the same basis of this dispute, i.e., the financial crisis due to COVID-19 pandemic. Therefore, the Sole Arbitrator shall stay these proceedings, CAS 2021/A/8319, until an award would be issued in CAS 2021/A/7872 to avoid violation of public policy according to Art 190 of Swiss PILA.

49. The Respondent objected that there were no grounds to grant the Appellant’s request since, according to Article 126 of the Swiss Civil Procedural Code (the “SCPC”), the facts and the Parties were not the same, and there was no legal connection between the two proceedings.

50. The Sole Arbitrator notes that the award issued in CAS 2021/A/7872 was already rendered and was even produced in this procedure: therefore, the Appellant’s request for suspension of the present proceedings became moot at this stage.