Real Betis Balompié SAD v. William Lanes de Lima

III. FACTUAL BACKGROUND

7. The facts leading to the present arbitration as presented by the Parties can be summarized as follows.

i. The Parties’ Contractual Relationship

8. On 13 August 2007, the Parties entered into a five season employment contract under which the Appellant agreed to employ the Respondent as a professional player.

9. On 16 May 2008, the Parties terminated the aforementioned contract by mutual consent and entered into the Employment Contract. The Employment Contract was valid from the date of its signature until 30 June 2012, i.e. four seasons, and could be renewed for an additional season if the Player played at least 25 official matches for Betis in the 2010/2011 and the 2011/2012 season. The Employment Contract was however not renewed for the fifth additional season. In theory, the Player was entitled to a salary of EUR 32,200 per season and a total “prima de contrato” of EUR 1,110,400, divided as follows: EUR 341,800 for the 2009/2010 season, EUR 384,300 for the 2010/2011 season and EUR 384,300 for the 2011/2012 season.

10. The relevant parts of the Employment Contract read as follows:

“(…)

Second – the following contract will have duration of 5 seasons (always determinate), starting its validity the

Third – the player will receive as a financial compensation the following amounts

1º Mensual salary (obligatory) season 07/08, 3 mensualities of 2,300€ in the following seasons season/07- 08, season/08-09, season/09-10, season/10-11, 14 mensualities of 2,300€ each one (including 2 paid bonus).

2º Premium of contract (…) in the season/08-09, season/09-10 341,800€ in each of them, in the season/ 10-11 and season 11-12, 384,300€ per season. The amounts will be paid at the end of each season with 4 promissory notes with deadline on September, October, November and December.

(…)

ADDITIONAL CLAUSES

(…)

In case of unfulfilment of the present clause by any of the contracting party, a penal compensation clause will be agreed in concept of lawsuit for damages that will ascend to three million Euros 30,000,000€.

(…)

5º The following contracted will be renovated by both parts, in the season 2012-2013 only if the player (…) takes part in a total of 25 official matches in the Real Betis Balompié team in the seasons 2010-2011 and 2011-2012 (…)”.

11. The Player sustained an injury on his right ankle in the 2008-2009 season while playing for Betis. The Respondent’s medical staff submitted him to physiotherapy and advised him to rest for the remainder of the season.

12. The Player resumed training in the 2009-2010 pre-season and suffered a recurrence of the knee injury. He was again sent to physiotherapy by the Respondent´s medical staff and cleared to continue attending the training sessions.

ii. The Player’s projected loan transfer to Clube de Regatas do Flamengo

13. On 10 August 2009, the Brazilian club Clube de Regatas do Flamengo (“Flamengo”) made an offer (“Flamengo’s Offer to Betis”) to sign the Player on loan from Betis. Flamengo’s Offer to Betis was subject to the Player passing a medical test with Flamengo and specifically read as follows:

“Clube de Regatas do Flamengo, comes herewith, to manifest their interest in contracting athlete William Lanes de Lima (…). The deal will be done on loan (…). The transaction will be made effective after athlete’s wages are settled and medical examination performed (…)”.

14. On the same date, Flamengo followed its offer with another letter to the Player (“Flamengo’s Offer to the Player”), enclosing the employment terms and conditions it proposed to enter into with the Player. Flamengo’s Offer to the Player read as follows:

“We confirm our interest in contracting you after the confirmation of loan by Real Betis, holder of your federative link, on the following conditions:

– Employment contract until 06/30/2010;

– Monthly salary of R$95.000,00 (ninety and five thousand realis)

– Partial or integral purchase option of economical and/or federative rights by Clube de Regatas Flamengo.

We communicate that the proposition presented will be effective after medical examinations are performed, which must occur until 08/20/2009 at the most”.

15. On 12 August 2009, the two clubs entered into an agreement (the “Loan Agreement”) under which Betis agreed to transfer the Player to Flamengo on loan from 12 August 2009 to 31 July 2010. The relevant parts of the Loan Agreement provided as follows:

“(…)

Second – the Player accepts the cession mentioned here of his federative rights and he compromise himself to integrate in the discipline of C.R. Flamengo, since today until the 31 of July 2010, being himself forced to be integrated to the Betis football team when the period ends.

The Player won’t be able to ask the Real Betis Balompié S.A.D. his remuneration during the cession period (…) because during this period he will be transferred to C.R. Flamengo (…)”.

16. On 18 August 2009, the Player travelled to Rio de Janeiro and was thereafter submitted to a medical examination by Flamengo on 19 August 2009.

17. On 21 August 2009, Flamengo’s medical staff issued the results of the medical examination (the “Medical Report”) stating that the Player had failed the medical on account of a chronic injury to his right ankle. The relevant parts of the Medical Report read as follows:

“(…)

Subject: Athlete William Lanes de Lima Medical Examinations

Athlete evaluated on August 19, 2009 by the medical department of C.R. Do Flamengo reports occurrence of severe sprain of right ankle in his club of origin in the month of February 2009. (…).

At the physical examination it was detected instability, moderate oedema and light pain of anterior right ankle. In the complementary examination with magnetic arthroresonance of right ankle performed on 08/20/2009 the following lesions were detected: marginal osteophyte on the anterior edge of distal extremity of tibia and talar beak; osteochondral lesion of the lateral portion of talar dome with bone marrow edema in adjacency; anterior talo fibular ligament poorly individualised suggesting lesion. Fibrocicatrical tissue in the deltoid ligament (…).

Conclusive opinion: the athlete has a chronic lesion of the right ankle and this department vetoes his admission.

(…)”.

18. On 25 August 2009, Betis requested the RFEF to send the Player’s International Transfer Certificate (“ITC”) to the Confederação Brasileira de Futebol (“CBF”).

19. After having communicated the results of the Medical Report to Betis, on 26 August 2009, the Player informed Betis that he remained at the Appellant’s service and was looking forward to receiving its directions.

20. On 27 August 2009, Betis informed the Player that pursuant to Article 18.4 of the FIFA Regulations on the Status and Transfer of Players (the “FIFA RSTP”), the operation of a loan or permanent transfer of a player could not be subjected to a medical examination. Betis informed the Player that they had already asked the RFEF to send his ITC to the CBF and further claimed that the Employment Contract with the Player had been terminated by mutual consent, following his projected transfer to Flamengo.

21. On 28 August 2009, Flamengo officially communicated the results of the Medial Report to Betis and informed the latter that they could not proceed with the Player’s transfer, which was subject to the Player passing a medical examination.

22. On 31 August 2009, Betis informed Flamengo that pursuant to Article 18.4 of the FIFA RSTP, the operation of a loan or permanent transfer of a player could not be made subject to a medical examination. Betis further claimed that its Employment Contract with the Player had been terminated by mutual consent following the projected transfer of the Player to Flamengo and Betis’ request to the RFEF to send the Player’s ITC to the CBF.

23. On 9 September 2009, the Player informed Betis that he was still under contract with Betis and consequently he asked the club to provide a road map for his medical treatment and to undertake to pay his salary for the 2009-2010 season.

24. On 25 September 2009, the Player sought a second opinion on the injury to his right ankle from Mr. Rodrigo Campos Lasmar, an orthopaedist. Mr. Lasmar compiled a report (“Mr. Lasmar’s Medical Report”) finding that the Player had a chronic rupture in his right ankle and osteochondral lesions of the talus which required surgery. He was of the opinion that the Player was not in a position to resume his duties.

25. On 30 September 2009, the Player underwent a successful surgery to his right ankle at his own costs and expenses.

26. Thereafter, the Player sent several notices to Betis on 30 September 2009 and 27 October 2009 asking the latter to comply with its contractual obligations including paying his salary for the months of August, September and October 2009 and covering the surgical expenses he had incurred to treat his right ankle, failing which he would terminate the Employment Contract with just cause. However, his several notices to Betis were not answered.

27. On 10 November 2009, the Player invoked Article 14 of the FIFA RSTP and informed Betis that he had terminated the Employment Contract with just cause.

iii. The FIFA Players’ Status Committee proceedings

28. On 14 November 2009, the Player filed a claim against Betis before the FIFA DRC. He claimed that Betis had breached the Employment Contract and therefore sought a finding to the effect that he was justified in terminating the same. He made the following prayers:

a) That Betis be ordered to pay his outstanding salaries for the months of August, September, October and November 2009, totalling to EUR 9,200;

b) That Betis be ordered to pay him EUR 1,248,000 in compensation;

c) That Betis be ordered to pay him EUR 50,000 as a refund of the expenses he had personally incurred towards the surgery;

d) That a 5% annual interest be attached on the amounts claimed; and

e) That sporting sanctions be imposed on Betis.

29. In defence, Betis submitted that:

a) The Employment Contract was suspended with the Player’s loan transfer to Flamengo. Therefore, Betis did not owe any duties or obligations towards the Player;

b) Pursuant to Article 18.4 of the FIFA RSTP, a transfer agreement cannot be subjected to a positive medical result;

c) In any case, it was Flamengo who breached the Transfer Agreement. The Player must therefore be sanctioned for breaching his duties towards Betis under the Employment Contract; and

d) Flamengo and the Player had fraudulently fabricated the Medical Report in order to enable the Player to join Flamengo on a free transfer basis.

30. On 25 March 2010, and through the CBF, the Brazilian club Atlético Rondoniense petitioned the FIFA Players’ Status Committee (“FIFA PSC”) for a provisional ITC in favour of the Player.

31. On 10 August 2010, Betis commenced separate proceedings against the Player before the Spanish courts seeking orders to the effect that the Player be found to have breached the Employment Contract and consequently ordered to pay Betis the liquidated damages clause of EUR 30,000,000 fixed therein. Betis’ claim was dismissed via a judgment rendered by the Spanish Ordinary Higher Court in July 2016.

32. On 17 August 2010, the Player signed an employment contract with the Brazilian club Atlético Mineiro (the “New Contract”), valid from the date of signature to 19 June 2012. He was entitled to a monthly salary of 60,000 Brazilian Reals (approximately EUR 25,000). In total, the remuneration due to the Player’s new employment contract with Atlético Mineiro amounted to EUR 575,000 (i.e. EUR 25,000 x 23 months).

33. On 17 January 2011, the RFEF informed FIFA that Betis had been placed under administration due to its insolvency.

34. On 6 September 2011, the FIFA General Secretariat informed the Parties that as a general rule, its judicial bodies “(…) cannot deal with cases of clubs which are in a bankruptcy proceeding, i.e. inter alia under administration”. He consequently, informed the Parties that FIFA did not appear “(…)to be in a position to further proceed with the investigation in the present case”.

35. On 27 September 2011, the Player filed an appeal (CAS 2011/A/2568 William Lanes de Lima v. FIFA & Real Betis Balompié S.A.D) with the CAS, appealing the FIFA General Secretariat’s decision (the “FIFA Bankruptcy Decision”) to decline to adjudicate his claim on account of Betis’ insolvency.

36. On 13 June 2012, the Spanish courts lifted the administration orders placed on Betis, clearing the Appellant to resume normal operations.

37. On 4 October 2012, the CAS rendered its award in CAS 2011/A/2568 William Lanes de Lima v. FIFA & Real Betis Balompié S.A.D and set aside the FIFA Bankruptcy Decision. The CAS ordered that the Player’s claim vis-à-vis Betis be referred to FIFA for hearing and determination.

38. On 18 February 2016, the FIFA DRC rendered the Appealed Decision and held as follows:

“1. The claim of the Claimant, William Lanes de Lima, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Real Betis Balompié, is ordered to pay the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 6,900 plus interest of 5% p.a. as of 14 November 2009 until the date of effective payment.

4. The Respondent is ordered to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 622,800 plus 5% interest p.a. as of 14 November 2009 until the date of effective payment.

5. (…)

6. Any further claim lodged by the Claimant is rejected.

(…)”.

39. The Appealed Decision was based on the following grounds:

a) The Player’s Employment Contract with Betis remained in force given that the Player never signed an employment contract with Flamengo. Betis was therefore under a duty to continue paying the Player’s salaries, but breached this duty.

b) The Player had just cause to terminate the Employment Contract for having not been paid his August, September, October and November 2009 salaries in addition to Betis having failed to cater for his medical expenses.

c) Betis were liable to pay the Player EUR 6,900, being the Player’s monthly salaries for August, September and October 2009, which were due prior to the termination of the Employment Contract.

d) The Player was to be compensated in accordance with Article 17.1 of the FIFA RSTP, and in particular the value remaining under the Employment Contract, which totalled to EUR 1,197,800, comprised of EUR 23,000 as salary for the 2009/2010 season, EUR 64,400 as salary for the 2010/2011 season, EUR 64,400 as salary for the 2011/2012 season and EUR 1,110,400 as “premium of contract” for the 2009/2010, 2010/2011 and 2011/2012 seasons. The monies due for the 2012/2013 season would not be considered given that the extension of the Employment Contract was subjected to certain terms and conditions. The amount of EUR 575,000 earned under the New Contracts had to be deducted from the compensation.

e) A 5% annual interest rate was to be added to all the amounts due, with effect from 14 November 2009, the date the Player filed his FIFA DRC claim; and

f) The Player’s request for a reimbursement of the medical expenses had to be rejected as it “lack[ed] a contractual basis”.

IV. THE PROCEEDINGS BEFORE THE COURT OF ABITRATION FOR SPORT

40. On 17 June 2016, the Appellant filed its Statement of Appeal pursuant to Article R47 et seq. of the Code of Sports-related Arbitration (the “CAS Code”). The Appellant named the Player and FIFA as respondents and nominated Mr. Michele Bernasconi, Attorney-at-law, Zurich, Switzerland, as arbitrator. The Appellant also sought a stay of the execution of the Appealed Decision.

41. On 24 June 2016, the CAS Court Office informed the Appellant that pursuant to CAS jurisprudence, a decision of a financial nature issued by a private Swiss association is not enforceable while under appeal, meaning there was no need for an application for stay. The Appellant was consequently granted 3 days to state whether it maintained its application for a stay.

42. On 27 June 2016, the Respondent nominated Mr. Ercus Stewart S.C., Barrister in Dublin, Ireland, as arbitrator.

43. On 28 June 2016 and 4 July 2016, the Appellant informed the CAS Court Office that it maintained its application for a stay.

44. On 27 and 29 June 2016, the Appellant filed its Appeal Brief together with exhibits it intended to rely on. The Appellant made, inter alia, the following evidentiary requests:

a) That FIFA be asked to produce a copy of the file leading to the Appealed Decision;

b) That FIFA be asked to produce a copy of the file involving the claim filed by Betis against Flamengo and the Player before the FIFA judicial bodies;

c) That FIFA and the CBF be asked to provide a list of all the clubs the Player had signed for from January 2010 to date;

d) That the RFEF be asked to produce a copy of the two employment contracts the Player had signed with Betis, and a copy of the contracts he had signed with Sport Clube Corinthians and Atlético Mineiro.

45. On 4 July 2016, FIFA sought to be discharged as a party from these proceedings on grounds that it merely acted as the decision making body leading to the Appealed Decision.

46. On 5 July 2016, the CAS Court Office invited the Appellant to state whether it wished to maintain FIFA as a respondent.

47. On 7 July 2016, the Appellant withdrew its appeal vis-à-vis FIFA.

48. On 7 July 2016, the CAS Court Office informed the Parties that FIFA had been discharged as a party. On the same date, the Respondent replied to the Appellant’s application for a stay, and requested that the same be dismissed.

49. On 20 July 2016, the Respondent requested that his 20-day deadline for filing the Answer be fixed only after receipt by CAS of the payment by the Appellant of its share of the advance of costs. This application was granted.

50. On 15 September 2016, the President of the CAS Appeals Division rendered his ruling on the Appellant’s request for a stay and dismissed the same.

51. On 22 September 2016, the Parties were informed that pursuant to Article R54 of the CAS Code and on behalf of the President of the CAS Appeals Arbitration Division, the Panel had been constituted as follows:

President: Mr. Rui Botica Santos, attorney-at-law, Lisbon, Portugal

Arbitrators: Mr. Michele A. R. Bernasconi, attorney-at-law, Zurich, Switzerland

Mr. Ercus Stewart S.C., Barrister, Dublin, Ireland.

52. On 18 September 2016, the Respondent filed his Answer together with exhibits he intended to rely on.

53. On 4 October 2016, the CAS Court Office invited the Parties to state whether they wanted a hearing or preferred to have the matter decided on the basis of their written submissions.

54. On 11 October 2016, the Appellant stated its preference to have the matter decided on the basis of the Parties’ written submissions.

55. On 12 October 2016, the Respondent informed the CAS Court Office of his wish for a hearing. On the same date, the Parties were informed that the Panel had decided to hold a hearing.

56. On 26 October 2016, the CAS Court Office requested FIFA to produce a copy of the file leading to the Appealed Decision and also that leading to the appeal in CAS 2011/A/2586 William Lanes de Lima v. FIFA & Real Betis Balompié S.A.D.

57. On 16 November 2016, FIFA sent a copy of the files leading to the Appealed Decision.

58. On 2 December 2016, the Appellant filed its submissions on the issues arising from the FIFA file.

59. On 15 December 2016, the Respondent replied to the Appellant’s submissions on the issues arising from the FIFA file.

60. On 16 December 2016, the CAS Court Office issued an Order of Procedure, which was returned duly signed by the Parties on the same day.

61. On 19 December 2016, a hearing was held in Lausanne, Switzerland. The Panel was assisted by Mr. Daniele Boccucci, Counsel to the CAS. The following persons attended the hearing:

For the Appellant

– Mr. Enrique Arnaldo Benzo, attorney-at-law, Seville, Spain

– Mr. Pablo de los Santos Parejo, attorney-at-law, Seville, Spain

For the Respondent

– Mr. Breno Costa Ramos Tannuri, attorney-at-law, São Paulo, Brazil

– Mr. William Lanes de Lima – the Player

– Mr. Fernando Benedini, as a witness, attending by conference call

– Dr. Rodrigo Campos Lasmar, as an expert witness, attending by conference call.

62. At the onset of the hearing, the Parties confirmed that they had no objection to the composition of the Panel, and went on to confirm the factual aspects of this case as set out in each other’s pleadings. The Appellant also admitted the credibility and accuracy of the witness statements filed by Mr. Fernando Benedini and Dr. Rodrigo Campos Lasmar and therefore waived the right to cross examine and/or have these witnesses summoned to orally testify on the contents of their statements.

63. At the end of the hearing, the Parties stated that they were satisfied with the manner in which the hearing had been conducted and that their right to be heard had been respected. The Panel also invited the Parties to explore the possibility of reaching an amicable settlement and to report to the CAS Court Office. The Parties were open to this possibility and agreed on a deadline of 23 January 2017 within which to revert to the Panel in the positive or negative.

64. On 27 January 2017, the Parties informed the CAS Court Office that they had failed to reach a settlement.

V. THE PARTIES’ RESPECTIVE POSITIONS

65. Below is a summary of the facts, allegations and submissions raised by the Parties. While the Panel has considered all the evidence, allegations, submissions and legal arguments presented by the Parties in the proceedings, it refers in this award only to the submissions and evidence it considers necessary to explain its reasoning.

A. The Appellant

a) Law applicable

66. The laws applicable to this dispute are Spanish law, the FIFA regulations and Swiss law. Spanish law because “the parties have agreed before on the contract the application of a specific national law, Spanish law”.

b) The Player was transferred to Flamengo

67. Flamengo’s Offer to the Player had all the requisites of an employment contract as laid out in FIFA Circular No. 1171/2008. It contained the proposed salary and duration valid through 6 June 2010. It became a binding employment contract once the Player and Flamengo appended their signatures thereto. There was no need for these terms to be reflected in the Loan Agreement, and neither was there a need for Flamengo and the Player to specify these terms on a separate written agreement, given that Article 8.1 of Spain’s Royal Decree 1/1995 recognises the validity of oral contracts.

68. Those parts of Flamengo’s Offer to Betis and of Flamengo’s Offer to the Player are ineffective by reason of Article 18.4 of the FIFA RSTP, which prohibits a transfer agreement from being subjected to a medical examination. This however does not render the rest of the Loan Agreement invalid. In any case, the Loan Agreement does not contain any clause subjecting its validity to the Player successfully passing a medical.

69. Betis’ duties and obligations towards the Player ceased with his transfer to Flamengo, which had effectively been sealed when the RFEF sent his ITC to the CBF. In fact, pursuant to Article 10 of the FIFA Commentary on the FIFA RSTP (the “FIFA Commentary”), the effects of a player’s employment contract with his original club remain suspended during the period in which a player is loaned to another club. This was reflected in the Loan Agreement, which is

clear that Betis’ would no longer be obliged to pay the Player’s salaries during his loan to Flamengo. The FIFA DRC thus erred by overlooking these provisions.

c) The Player’s and Flamengo’s liability towards Betis

70. By subjecting the Player’s transfer to a successful medical examination, Flamengo contravened Article 18bis of the FIFA RSTP as this inevitably placed the Player’s employment status in a dilemma. This equally interfered with Betis’ contractual relationship with the Player, more so given the fact that the Player’s ITC had already been sent to the CBF.

71. Flamengo further breached the Loan Agreement by failing to pay the Player’s salary for a period of 3 months.

72. It is clear that Flamengo induced the Player to breach the Employment Contract by allowing him to train with it before proceeding to refuse to sign him on loan on grounds that he had failed the medical.

73. It follows that both Flamengo and the Player are liable, and should compensate Betis. The compensation should be determined following the principles established in CAS 2005/A/902, CAS 2008/A/1519 and CAS 2010/A/2147, considering the fact that:

a) The Employment Contract had a liquidated damages clause of EUR 30,000,000;

b) Betis had paid a transfer fee of EUR 2,380,000 to acquire the Player for a projected period of five seasons. However, the Appellant was unable to amortise EUR 1,698,000 of this amount as a result of the Player’s premature termination of the Employment Contract;

c) The Player had received EUR 1,100,000 in salaries during his time with Betis; and

d) The termination took place in the protected period, for which sporting sanctions ought to be imposed on the Player.

74. Sporting sanctions should also be imposed on Flamengo for inducing the Player to terminate the Employment Contract.

d) The termination was unjustified

75. The Player had no just cause to terminate the Employment Contract. An ITC had initially been requested for him to join Flamengo, only for him to later change his mind and sign for Atlético Mineiro. In addition, Betis was not in a position to recall the Player and register him at the RFEF because they were not in possession of his ITC. The Player therefore terminated the Employment Contract without just cause.

76. The Player had already been transferred to Flamengo. His 3 months’ salaries were therefore due from Flamengo and not Betis.

77. Even assuming that his transfer to Flamengo fell through, the Player would still have had no just cause to terminate the Employment Contract given that he had only gone unpaid for 3 months, and the season (2009-2010 season) was yet to end. Pursuant to Article 16 of the FIFA RSTP, a contract can only be terminated during the season by mutual consent.

78. The true reason as to why Flamengo declined to sign an employment contract with the Player is because they had failed to agree on the personal terms. The Medical Report was simply a disguise. This is evident in a letter dated 9 September 2009 from the Player’s representative to Betis in which he informs Betis that “our client and (…) Flamengo did not arrive at an agreement in terms of the employment terms necessary to agree the transaction”. The Player fraudulently manufactured the failed medical examination in order to free himself from the Employment Contract and sign for Atletico Mineiro as a free agent. This is corroborated by the fact that he did not sign for Atlético Rondoniense despite having been granted provisional registration by FIFA.

e) The Player’s representative must be sanctioned for inducement

79. The Player’s representative induced the Player to breach the Employment Contract and must therefore be sanctioned in accordance with Article 17.5 of the FIFA RSTP.

80. After sending Betis the letter dated 9 September 2009, the Player’s representative subsequently sent several letters to Betis asking them to recall the Player without filing any action against Flamengo, and ostensibly facilitated the FIFA Players’ Status Committee petition to be provisionally registered for Atlético Rondoniense before proceeding to terminate the Employment Contract and suing Betis before the FIFA DRC.

81. The Player’s representatives particularly (i) insisted that Betis were liable to pay the Player’s outstanding salaries, notwithstanding the fact that he had been transferred to Flamengo and (ii) advised the Player to train with Atlético Mineiro while his Employment Contract was still in force.

82. It is apparent that the Player’s representatives induced him to terminate the Employment Contract so that he could get better terms at Atlético Mineiro. The representatives must be sanctioned in accordance with Article 17.5 of the FIFA RSTP.

f) The compensation awarded to the Player is excessive

83. The compensation awarded to the Player is excessive because (i) Betis did not breach any law. Betis neither terminated the Employment Contract nor acted unfairly and (ii) the Player had in fact breached the Employment Contract by training with Atlético Mineiro without Betis’ consent and (iii) the FIFA DRC overlooked Article 17.1 of the FIFA RSTP, particularly the issues highlighted at paragraph 73 above.

84. Pursuant to Article 15.1 of Royal Decree 1006/1985 of 26 June, the maximum amount of compensation payable for premature termination of contracts is 2 months’ salary.

85. The FIFA DRC also ignored the administration proceedings facing Betis at the time the Player lodged his claim. It particularly arrived at the compensation in disregard of the fact that the Player had failed to enjoin himself as a creditor in the insolvency proceedings that were pending before the Spanish courts, or at least drawing the Spanish court’s attention to his claim vis-à-vis Betis. This is an important factor which ought to mitigate the compensation.

g) Prayers and requests

86. The Appellant concludes by asking the CAS to find as follows:

“I. The Player and Flamengo should indemnify Real Betis Balompié, Regulations on the Status and Transfer of Players (version 2009) Article 10 Loan of professionals, Article 17 consequences of terminating a contract without just cause. Article 18bis Third-party influence on clubs.

II. The contract of assignment is fully valid and contains the necessary labor obligations, Regulations on the Status and Transfer of Players (version 2009) Article 18 Special provisions to contracts between professionals and clubs 4. The validity of a contract may not be made subject to a successful medical examination and/or the grant of a work permit.

III. The Player contract was unilaterally … resolved … without just cause, so must be punished, Regulations on the Status and Transfer of Players (version 2009) Article 13 respect of contract. Article 17.3 consequences of terminating a contract without just cause. 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.

IV. The attorney of the player must be sanctioned, Regulations on the Status and Transfer of Players (version 2009) Article 17.5 Any person subject to the FIFA Statutes and regulations (club officials, players agents, players etc.) who acts in a manner designed to induce a breach of contract between a professional and a club in order to facilitate the transfer of the player shall be sanctioned.

V. The compensation to player is disproportionate considered by the Chamber is non reasonable and an unjustified amount and breaks article 2 of the Rules Governing the Procedures of the Players´ status Committee and the Dispute Resolution Chamber. It is not considering the Spanish national law nor the Spanish RD 1006/85 nor administration proceedings Spanish law 22/2003”.

B. The Respondent

a) Res judicata

87. The issue as to whether or not the Player breached the Employment Contract, and consequently whether he ought to pay Betis EUR 30,000,000 in compensation is subject of a final and binding decision, having been heard and determined by Spanish Ordinary Higher Court in the judgment of July 2016. It is therefore res judicata and cannot be re-litigated before the CAS. This, however, does not “(…) prevent the CAS to consider the ongoing matter and provide an arbitral award but, certainly, it prevents the Appellant to claim any sort of compensation or indemnity from the Respondent”.

88. Therefore, any and all prayers or requests for compensation sought by Betis in these proceedings must be dismissed.

b) Standing to be sued

89. Betis’ claims and requests against Flamengo are fatally defective as the latter lacks standing to be sued in these proceedings. This is corroborated by the fact that Flamengo was neither summoned nor named as a party in the FIFA DRC proceedings leading to the Appealed Decision, nor has it been named as a party in these appeal proceedings before CAS. Betis can only claim damages from Flamengo by filing separate proceedings before the FIFA PSC.

90. The Player’s agent also lacks standing to be sued and the Appellant’s prayers as sought against the agent must therefore be dismissed.

91. Notwithstanding the above, Article 18bis of the FIFA RSTP does not prohibit a third party or a lawyer from advising a player or club on transfer or employment related matters. Therefore, the Player’s representative cannot be held liable for allegedly advising him to terminate the Employment Contract so as to secure better terms with Atlético Mineiro.

c) The Player was never transferred to Flamengo

92. The Player’s termination of the Employment Contract was justified. He remained contracted to Betis notwithstanding the latter’s conclusion of the Loan Agreement with Flamengo. The Loan Agreement cannot be deemed as a tripartite agreement. It does not contain the employment terms and conditions between the Player and Flamengo. The Player only signed the Loan Agreement as a sign of consent thereto (Article 10 of the FIFA RSTP as read together with the FIFA Commentary).

93. Article 18.4 of the FIFA RSTP does not extend to loan agreements. It only applies to employment contracts. In any case, pursuant to CAS jurisprudence (CAS 2013/A/3314), a transfer agreement may be subjected to the player passing a medical examination.

94. Betis’ assertions that the RFEF had sent the Player’s ITC to the CBF are misleading. The Loan Agreement was signed when the 2009 FIFA RSTP were in force, during which period the ITC procedure was performed manually, with a new club which could only have registered a player at the new association by depositing a copy of its new employment contact with the player. It is therefore impossible for the Player’s ITC to have been issued to the CBF in the absence of a copy of the Player’s employment contract with Flamengo. The CBF did not request the Player’s ITC from the RFEF. No ITC was ever sent to the CBF.

95. The Player did not sign Flamengo’s Offer to the Player. In any case, Flamengo’s Offer to the Player cannot be regarded as an employment contract because it did not conform with all the prerequisites of a valid employment contract as enshrined under the FIFA RSTP. Betis knew that the Player’s transfer to Flamengo was subject to him passing a medical test.

96. The medical test was performed by one of Brazil’s most experienced and renowned doctors, and it is disrespectful for Betis to allege that the doctor conspired the Medical Report.

97. Flamengo’s decision not to enter into an employment contract with the Player meant that the Player’s employment Contract with Betis was not suspended.

d) Just cause

98. The Player’s termination was justified. His August, September, October, and part of November 2009 salaries had remained unpaid notwithstanding several notices sent to Betis. Betis’ breach had become unreasonable and persistent to an extent which justified the Player’s termination, in line with the FIFA Commentary, as the Player had not been paid for more than three months.

99. Betis had also failed to reimburse the Player’s surgery expenses. This was in breach of Article 328 of the Swiss Code of Obligations (the “CO”), pursuant to which an employer must take all reasonable measures to provide his employees with nursing and medical treatment.

e) Compensation

100. The amount and criteria adopted by the FIFA DRC are valid. The FIFA DRC rightly applied Article 17.1 of the FIFA RSTP and not Spanish law, the latter being inapplicable to this matter. It took into account the value remaining under the Employment Contract and the values due to the Player under his new employment contract with Atlético Mineiro. It eventually awarded the Player EUR 622,800, which was less than what he was entitled to, given that the value remaining under the Employment Contract was EUR 1,110,400.

101. In addition, the FIFA DRC overlooked the Player’s entitlement to a refund of the expenses he had personally incurred for the surgery and the pay cut he had to take upon signing for Atlético Mineiro. It also ordered that the 5% p.a. interest be calculated with effect from 14 November 2009, the date the Player filed his FIFA DRC claim, as opposed to 10 November 2009, the date of termination.

102. The Player’s FIFA claim was filed before Betis went into liquidation and/or receivership. Therefore, Betis cannot seek to have the compensation mitigated on grounds that the Appealed Decision was rendered in disregard of the insolvency proceedings that had been pending before the Spanish courts.

103. The compensation awarded to the Player is therefore fair and proportionate.

f) Prayers and requests

104. The Respondent concludes by asking the CAS to:

“FIRST – To dismiss in full the appeal lodged by the Appellant against the Respondent in front of the CAS;

SECOND – To confirm in full the Appealed Decision rendered by the FIFA DRC;

THIRD – To order the Appellant to pay the full amount of the CAS arbitration costs; and

FOURTH – To order the Appellant to pay a significant contribution towards the legal costs and other related expenses of the Respondent, at least in the amount of CHF 20,000 (twenty thousand Swiss Francs)”.