Liaoning Football Club v. Chinese Football Association (CFA), Wisdom Fofo Agbo

II. FACTUAL BACKGROUND

4. Below is a summary of the main relevant facts as established by the submissions made by the parties and the evidence examined in the course of the proceedings. This background is set out for the sole purpose of providing a synopsis of the matter in dispute. Additional facts may be referred to, where relevant, in connection with the later legal discussion.

A. Background Facts

5. On 25 February 2015, the Club and the Player concluded an employment contract (the “Employment Contract”), valid from the date of its signing to 31 December 2015.

6. The Employment Contract states, inter alia, that

• the Player “must be responsible to join the whole 2015 season’s matches, before leaving the team” ;

• the Player has to “[p]articipate in all matches, team training and special training discussions as well as other activities organized by the [Club]”. (…) He “cannot refuse to attend with any excuse”.

7. Regarding the Player’s salary, the Employment Contract contains, inter alia, the following terms:

“Article 10: Salary and Bonuses

1. Salary: During the contractual period, [the Player’s] month salary is 10.900 USD (net), The annual salary of 2015 for [the Player] reaches a total amount of 120.000 USD (net) which shall be paid to [the Player] evenly by 11 months in 2015, siganature [sic] fee for [the Player] in 2014 is: 50.000USD (net).

2. Each month of 15 th, [the Club] will pay the last month salary to [the Player]”.

8. On 27 February 2015, the Player participated in his first and only training session for the Club.

9. On 1 March 2015, the Player requested the Club to grant him leave to go to Canada to visit and take care of his wife who had suffered a car accident. The Club granted the Player leave.

10. On 31 March 2015, the Player requested the Club to extend his leave as his wife was still in poor physical condition. The Club accepted the Player’s request for an extension of his leave.

11. A returning date was never fixed. And in fact, the Player never returned to the Club.

12. On 14 January 2016, the Player signed an “Announcement” (the “Announcement” or the “Termination Letter”), which contained the following wording:

“I am FOFO (…) here announce that I did not play for Liao Ning Football Club in the season of 2015 CSL because of my own problem (emergency happened from my family member) and now I want to terminate the contract with Liao Ning Football Club give up all the power and all the money in the contract e.g.: salary, signfee [sic], bonus and so on in the contract and myself will not appeal any kinds of money from anywhere like: CFA and FIFA. And here I apply to the club do not appeal myself any kinds of money from any where like: CFA and FIFA. And allowed me to transfer to any club as a free player. Thanks a lot for your cooperation and understanding”.

B. Proceedings before the FIFA Dispute Resolution Chamber

13. On 30 June 2015, and completed on 28 September 2015, the Player brought a claim against the Club to the FIFA Dispute Resolution Chamber (the “FIFA DRC”) requesting payment of his salaries “for six months, from February 2015 to present (August 2015), plus my signing-fee (of $50,000)”.

14. On 14 October 2015, the FIFA DRC sent a fax to the CFA with the following wording:

“Dear Sir, We wish to inform you and your affiliated club, Liaoning FC, that the player, Wisdom Fofo Agbo lodged a claim against Liaoning FC in front of FIFA. In this respect, please find enclosed herewith a copy of the player’s correspondence for your and Liaoning FC’s perusal.

In view of the foregoing, we kindly invite Liaoning FC to provide us with its position to the claim lodged by the player, along with any documentary evidence it deems useful in its support, by no later than 3 November 2015.

(…)

With reference to art. 9 par. 5 of the Procedural Rules, we kindly ask the Chinese Football Association to immediately forward the present documents to Liaoning FC, which are considered to have been communicated

properly to Liaoning FC within the next four days. In this regard, we wish to highlight that according to art. 9 par. 5 of the Procedural Rules failure by the Association to comply with this instruction may result in disciplinary proceedings in accordance with the FIFA Disciplinary Code.

We thank you in advance for your kind cooperation in this matter and for forwarding the present documents to Liaoning FC without delay.

Yours faithfully

On behalf of the Dispute Resolution Chamber

Mario Flores Chemor Legal Counsel Players’ Status”.

15. On 4 December 2015, the FIFA DRC sent a fax to the CFA stating that it had not received any correspondence from the Club in response to the fax dated 14 October 2015. The FIFA DRC notified the CFA in the same letter that the investigation phase of the present matter wa s closed and no further submissions from the parties would be admitted to the file. Furthermore, the FIFA DRC requested that the CFA provide it with a fax number for the Club and to forward the present fax to the Club.

16. On 7 December 2015, by fax dated 7 November 2015, the CFA declared to FIFA that the Club’s fax number was 0086-24-31877344.

17. On 10 March 2016, the FIFA DRC sent a fax to the CFA in which the CFA was informed that the matter at hand was going to be submitted to the FIFA DRC for a formal decision on 18 March 2016. This fax was also sent to the supposed fax number of the Club (0086 -24- 31877344). The fax could not be sent to said number; FIFA DRC received a (fax) NON Delivery Notification.

18. On the same day, i.e. on 10 March 2016, the FIFA DRC sent a fax to the CFA with the following wording:

“Dear Sirs,

We revert to the above-mentioned matter and wish to provide you with another copy of our letter of today, which we enclose hereto.

Since it appears that the fax number of your affiliated club, Liaoning FC is not operative, we kindly ask you to immediately forward our letter of today to your affiliated club.

We thank you in advance for your valuable cooperation and for informing your affiliated club, Liaoning FC of the above.

Yours faithfully

On behalf of the Dispute Resolution Chamber

Mario Flores Chemor Legal Counsel Players’ Status”.

19. On 10 or 11 March 2016, the Appellant received FIFA’s letter of 10 March 2016, which had been forwarded by the CFA.

20. On 15 March 2016, the Club informed FIFA that the Club had not been aware of the pending FIFA proceedings until receipt of the faxes of 10 March 2016. The Club demanded that FIFA – inter alia – provide the Club with the Player’s written submissions, that it grant the Club permission to file submissions within 24 hours, and that it grant the Club the right to submit new evidence at a later stage. The Club claimed that there had been no dispute between the Club and the Player. Furthermore, the Club referred to the Announcement signed by the Player in which he was purported to have waived all pecuniary claims stipulated in the Employment Contract.

21. On 16 March 2016, FIFA granted the Club a 24-hour deadline to provide a document from the CFA in which the CFA declared that it had not forwarded to the Club the claim lodged by the Player.

22. On 17 March 2016, the Club informed FIFA that it had requested the demanded document from the CFA. The Club claimed that it could not be confirmed with certainty that the CFA had properly forwarded the FIFA communications to the Club, due to the fact that the CFA was unable to find a corresponding fax delivery notification. Furthermore, the CFA had not yet replied to the Club’s written request. The Club demanded that FIFA declare the closure of the case or, alternatively, extend the investigation phase and send to the Club the Player’s written submissions.

23. On 18 March 2016, the FIFA DRC passed the following decision (the “Appealed Decision”)

1. The claim of the Claimant, Wisdom Fogo Agbo, is accepted.

2. The Respondent, Liaoning FC, is ordered to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of USD 115,400. 3. In the event that the amount due to the Claimant in accordance with the above-mentioned number 2. is not paid by the Respondent, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. The Claimant is directed to inform the Respondent, immediately and directly, of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

24. On 1 April 2016, the Appealed Decision was delivered to the parties.

25. On 11 April 2016, the Club requested that FIFA provide it with the grounds of the Appealed Decision.

26. On 17 June 2016, the grounds of the Appealed Decision were communicated to the parties, determining, inter alia, the following:

5. Subsequently, the Chamber took note that the Respondent’s reply was submitted to FIFA only after the parties had been duly informed that the investigation-phase of the matter at hand had been closed and that no further submissions would be admitted to the file.

6. With the aforementioned in mind, the DRC referred to art. 9. Par. 3 of the Procedural Rules, in accordance with which if no statement or reply is received before the time limit expires, a decision shall be taken upon the basis of the documents already on the file, as well as to art 9. Par. 4 of said rules which stipulates that parties shall not be authorised to supplement or amend their requests or their arguments, to produce new exhibits or to specify further evidence on which they intend to rely, after notification of the closure of the investigation.

7. The DRC decided thus not to take into consideration the reply of the Respondent when assessing the matter at hand. Consequently, the members of the DRC concluded that they shall take a decision upon the statements and documents presented by the Claimant only.

8. As a consequence of the aforementioned, the members of the Chamber duly noted that according to the Claimant, the Respondent had failed to pay his salaries “for six months, from February 2015 to present (August 2015)”.

9. Taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had substantiated his claim pertaining to outstanding remuneration with sufficient documentary evidence. Nevertheless, the Chamber emphasised that, as the contract was concluded on 25 February 2015 and that the latter provided for 11 monthly salaries, the first salary was payable in March 2015.

10. On account of the aforementioned considerations, the DRC established that the Respondent failed to remit the Claimant’s remuneration in the total amount of USD 115,400 corresponding to his salaries as of March 2015 until August 2015 plus the sign-on fee.

11. Consequently, the Chamber decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay the Claimant outstanding remuneration in the total amount of USD 115,400.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

27. On 8 July 2016, the Appellant filed a Statement of Appeal with the Court of Arbitration for Sport (the “CAS”) in accordance with Article R47 et seq. of the Court of Sports-related Arbitration (the “CAS Code”). In its submissions, the Appellant requested the Appeal to be heard by a Sole Arbitrator appointed by the President of the CAS Appeals Arbitration Division.

28. By letter dated 11 July 2016, the CAS Court Office requested the Club to complete the Appeal according to Article R48 para. 3 of the CAS Code, namely to provide the CAS Court Office with the full address of the First Respondent, within three days.

29. On 15 July 2016, the Appellant informed the CAS Court Office that it had tried its best to obtain the address of the First Respondent, by repeatedly contacting FIFA, the Asian Football Confederation, the Player himself, the Hong Kong Football Association, and the new club of the Player, namely the South China Football Team, but none of the parties had been willing to provide the Club with the address. The Club requested CAS to accept the address of the South China Football Team as the official address of the Player.

30. On 18 July 2016, the Appellant informed the CAS Court Office that it had contacted FIFA again on 15 July 2016, requesting the address of the Player and informing it that the Club was waiting for FIFA’s answer. The Appellant informed CAS that it had contacted the Hong Kong Football Association and also the Player himself and had asked them for the Player’s address but had been unsuccessful. The Appellant reiterated that, in any case, the address of the South China Football Team was sufficient for CAS to consider it as the official address of the Player.

31. On 18 July 2016, the CAS Court Office initiated the present proceedings and i nvited the Respondents to provide their positions with respect to the Appellant’s request that a Sole Arbitrator be appointed within a deadline of 5 days.

32. On 18 July 2016, the Appellant filed its Appeal Brief in accordance with Article R51 of the CAS Code. The Appellant submitted the following requests for relief:

1. Fully accept the present appeal against the Decision of the FIFA Dispute Resolution Chamber dated 18 th March 2016;

2. Determine that:

a. To set aside the appealed FIFA Decision; b. Declare that no compensation shall be paid to the Respondent; c. Request FIFA to provide the Appellant with the Claim submitted by the Respondent before FIFA DRC; d. Condemn the Respondent to pay the entirety of the CAS Costs; e. Condemn the Respondent to pay the Appellant a compensation for the legal fees and expenses incurred in relation with this case.

Alternatively,

3. In case the Honourable Panel finally determines that CFA is finally needed to be considered as a party (Second Respondent) in this procedure:

a. Request the CFA the disputed sending proof of the facsimile sent to the Appellant with regard to the Claim.

33. On 20 July 2016, the Player himself replied that he did not agree with the Appellant’s request for a Sole Arbitrator.

34. On 26 July 2016, the CAS Court Office noted that the Second Respondent had not provided its position on the Appellant’s request for a Sole Arbitrator. In addition, the CAS Court Office invited the Respondents to state whether they intended to pay their shares of the advance of costs in the present proceedings.

35. On 29 July 2016, the Player informed the CAS Court Office that he intended to pay his share of the advance of costs.

36. On 2 August 2016, the CAS Court Office noted that the Second Respondent had failed to state whether it was intending to pay its share of the advance of costs and informed the parties that the President of the CAS Appeals Arbitration Division would decide on the number of arbitrators in due course.

37. On 3 August 2016, the CAS Court Office informed the parties that the President of the CAS Appeals Arbitration Division had decided to submit the present matter to a Panel of three arbitrators.

38. On 8 August 2016, the Player filed his answer in accordance with Article R55 of the CAS Code. The Player submitted the following requests for relief:

a. Reject and throw out the Appellant’s appeal; b. Uphold and confirm the FIFA DRC decision of 18 March 2016; c. Enforce the FIFA DRC decision of 18 March 2016; d. Order the Appellant to reimburse the Respondent for legal expenses incurred; e. Query and determine a punishment for the Appellant.

39. On 12 August 2016, the Appellant nominated Mr Michele Bernasconi, Attorney-at-law in Zurich, Switzerland, as an arbitrator.

40. On 17 August 2016, the CAS Court Office noted that the Second Respondent had failed to fi le an answer to the Appeal Brief within the prescribed deadline or any other communication in the present proceedings. In the same letter, the CAS Court Office asked the parties whether they preferred a hearing to be held in this matter or the issuing of an award by the Panel based solely on the Parties’ written submissions.

41. By letter dated 23 August 2016, the Appellant announced its preference for the Panel to issue an award based solely on the parties’ written submissions and, should the Panel need further clarification from the parties, suggested a second round of written submissions instead of a hearing.

42. On 23 August 2016, the CAS Court Office noted that the Respondents had failed to jointly nominate an arbitrator within the prescribed deadline. The parties were informed that the President of the CAS Appeals Arbitration Division, or her Deputy, would appoint an arbitrator in lieu of the Respondents.

43. On 24 August 2016, the Player informed the CAS Court Office of his preference for an award based solely on the parties’ written submissions and submitted that a second round of submissions should be allowed if the Panel considered it necessary.

44. On 4 October 2016, in accordance with Article R54 of the CAS Code and on behalf of the President of the CAS Appeal Arbitration Division, the CAS Court Office informed the parties that the Panel appointed to decide the present matter was constituted as follows:

Prof. Martin Schimke, Attorney-at-Law in Dusseldorf, Germany, as President; Mr Michele Bernasconi, Attorney-at-Law in Zurich, Switzerland; and Mr Pat Barriscale, Barrister in Limerick, Ireland, as Arbitrators.

45. On 11 October 2016, FIFA informed the CAS Court Office that it was renouncing its right to intervene in the present arbitration proceedings.

46. On 8 November 2016, FIFA, upon request of the Panel pursuant to Article R57 of the CAS Code, provided CAS with a copy of its file of the present matter.

47. On 5 December 2016, the CAS Court Office informed the parties of the Panel’s decision to allow a further round of submissions, limited to the rationale and circumstances surrounding the “Announcement 14 January 2016”. The Appellant was granted a deadline of 20 days for filing its submissions in this respect. The Player was granted a similar deadline of 20 days from the receipt of the Appellant’s additional submissions for filing his reply thereto.

48. On 23 December 2016, the Appellant filed its submissions to the “Announcement 14 January 2016”.

49. On 12 January 2017, by letter dated 12 December 2016, the Player filed his reply to these submissions of the Club.

50. On 19 January 2017, and after further consultation of the parties on 12 January 2017, the CAS Court Office informed the parties that the Panel had decided to render an award on the basis of the parties’ written submissions.

51. On 24 January 2017, the Player signed the Order of Procedure and returned it to the CAS Court Office.

52. On 25 January 2017, the Club signed the Order of Procedure and returned it to the CAS Court Office.

53. In particular, the Appellant and the First Respondent expressly confirmed that their right to be heard has been respected.

54. On 31 January 2017, the CAS Court Office noted that the Second Respondent had failed to sign and return the Order of Procedure within the prescribed deadline.

55. By letter dated 4 February 2017, the Appellant filed additional submissions.

56. By letter dated 6 February 2017, the Player filed a reply thereto and requested that the Panel decide on the admissibility of said letter of the Appellant.

57. On 7 February 2017, the CAS Court Office informed the parties that the Panel declared the letters of the parties dated 4 and 6 February 2017 as inadmissible and irrelevant.

IV. SUBMISSIONS OF THE PARTIES

58. The Panel confirms that it had carefully taken into account in its decision all of the submissions, evidence, and arguments presented by the parties, even if they are not specifically summarised or referred to in the present Arbitral Award.

A. The Appeal

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

– First, the Appellant claims a violation of the right to be heard and alleges that it had not been properly informed about the proceedings before the FIFA DRC. Prior to 10 March 2016, the Club had never been informed by FIFA or by any other third party of the present dispute. In the letter dated 10 March 2016, it had only been informed that the matter at hand would have been submitted to a meeting of the FIFA DRC on 18 March 2016. The Club did not have any chance to defend itself in the proceedings before the FIFA DRC. The Club informed FIFA about the procedural irregularities but had not succeeded in being given a fair proceeding. In addition, FIFA had failed to take the submitted Announcement signed by the Player into consideration in the Appealed Decision.

– The Club was neither at fault nor was it guilty of any negligence in the proceedings before the FIFA DRC. The Club could not be held responsible for the CFA’s failure to forward FIFA’s correspondences to the Club. Therefore, in its decision, CAS must take into consideration the full content, including all the facts, statements, and evidence of the present appeal, i.e. the appeal submissions should not be limited in any way and every right of the Club that may have been violated during the first instance proceedings must be subsequently cured by means of the present appeal. If this is the case, the

Appellant’s request to include the CFA as the Second Respondent should be automatically withdrawn.

– Regarding the financial obligations set out in the Employment Contract, the Appellant argues that the Player is not entitled to any compensation.

– The Player participated in only one training session for the Club. The Player did not play in one single official match arranged by the Club. The Player did not fulfil any of his obligations of the Employment Contract. Because the Respondent did not perform for the Club, the Club was not obligated to pay the salaries, i.e. it was not obligated to unilaterally perform its obligations under the Employment Contract. In addition, the Employment Contract expressly provides that the Player must – inter alia – participate in the 2015 season’s matches before leaving the team. Similar rules and wording are provided in the CFA Basic Requirements for Players’ Labour Contracts and in CAS jurisprudence.

– The Club granted the Player temporary leave. However, the granting of such leave does not mean that the Player has the right to decide how long that leave will be. The Player should have returned within a reasonable time at least. Instead, he was absent for the whole season.

– The Player failed to prove that he is entitled to the salaries for the time of his leave. According to CAS jurisprudence, the Player has the burden of proving that the Club authorized or acquiesced in the Player’s various absences, that the Club acquiesced in or agreed to the duration of each of these absences, and that the Club agreed to continue paying the Player’s salary during his absence.

– The Player never notified the Club before filing his claim before the FIFA DRC. In accordance with established CAS jurisprudence, the Player should have sent a reminder or a notice of default to the Club before filing the claim.

– Finally, the Appellant argues that, in the Announcement, the Player expressly, voluntarily, and consciously waived/renounced all pecuniary claims in the Employment Contract.

– The Player requested the Club to provide him with a release letter confirming his free - agent status. After this conversation, both parties amicably agreed to the mutually exchange the release letter and the Announcement. The Club demanded the Announcement as a means of protecting itself against any potential claims by the Player in relation to the Employment Contract. The Player never raised any objections to exchanging the Announcement. Furthermore, the Club never refused to send a release letter to the Player. The Player’s allegations that he had no option but to sign the Announcement are groundless.

– A connection between the Announcement and the procedure before FIFA cannot be established because at that time the Club was not aware of the dispute.

B. The answer from the Player

60. The Player’s submissions, in essence, may be summarised as follows:

– Regarding the alleged violation of the right to be heard, the Player argues that the Appellant intentionally ignored FIFA’s letters and notifications. The CFA was not entirely responsible for forwarding FIFA’s correspondence to the Club.

– As to the Club’s financial obligation towards the Player, the Player argues that the Club granted him leave to go to Canada.

– The Club breached the Employment Contract by not fulfilling its obligations to pay the sign-on fee and the salaries to the Player.

– The Player had on several occasions requested his (outstanding) salary from the Club. Therefore a dispute had arisen between the parties, which led to the filing of the claim with FIFA.

– The special circumstances that led to the Player’s leave to go to Canada are comparable to a situation in which a player gets injured. In such situations, a club has to continue paying the player’s salary.

– The Player asked the Club for a release letter, but the Club refused to provide him with such a letter before a termination letter was signed.

– Because of this, the Player signed the Announcement in exchange for a release letter so that he could play for another club. The Announcement was signed two weeks after the Employment Contract expired and is therefore null and void.

C. The answer from the CFA

61. As stated above, the CFA has failed to file an answer within the deadline prescribed at Article