Bursaspor Kulübü Dernegi v. Sebastian Frey

II. BACKGROUND FACTS

3. Below is a summary of the main relevant facts and allegations based on the parties’ written submissions, pleadings and evidence adduced at the hearing. Additional facts and allegations may be set out, where relevant, in connection with the legal discussion that follows. Although the Sole Arbitrator has considered all the facts, allegations, legal arguments and evidence submitted by the parties in the present proceedings, he refers in this Award only to the submissions and evidence he considers necessary to explain his reasoning.

4. On 16 July 2013, the Club and the Player signed an employment contract valid from that date until 31 May 2016 (the “Employment Contract”). Under the Employment Contract, the Club was obliged to pay the Player, inter alia, the following1:

• For the 2015/16 season, total wages of EUR 1,500,000 (net) in ten equal monthly instalments commencing on 30 August 2015 and ending on 30 May 2016;

• Under Article (f) of the special provisions, a guaranteed bonus of at least EUR 250,000 EUR (net) per season, payable by the end of May of the respective season in which the bonus was due.

5. On 13 July 2015, the Club and the Player signed a settlement agreement (the “Settlement Agreement”) which under Art. 2b of the Settlement Agreement committed the Club to pay to the Player the amount of EUR 850,000 (net) instead of the EUR 1,500,000 (net) due under the Employment Contract for the 2015/16 season. The payment schedule (the “Schedule”) in the Settlement Agreement was set out as follows:

• EUR 85,000 on 30 September 2015;

• EUR 85,000 on 30 October 2015;

• EUR 85,000 on 30 November 2015;

• EUR 85,000 on 30 December 2015;

1 The Sole Arbitrator notes that the Club was also obliged to provide the Player with numerous other benefits including appearance bonuses, win bonuses, flight tickets etc. however they have not been listed in this Award as these benefits were not disputed between the parties and were therefore not relevant to this dispute.

• EUR 85,000 on 30 January 2016;

• EUR 85,000 on 28 February 2016;

• EUR 85,000 on 30 March 2016;

• EUR 85,000 on 30 April 2016;

• EUR 85,000 on 30 May 2016; and

• EUR 85,000 on 30 June 2016.

6. Further, the Settlement Agreement stated as follows:

“2.

a. The parties mutually agree that the Club is obliged to pay the Player the amount of net EUR250.000.- (Article f of Special Provisions) unconditionally and irrevocably on 30 August 2015.

…

3. In case of non payment of one of the installments [sic] stated above for more than 60 days, the agreed amount stated in article 2/b will be annulled and the Parties will go back to the conditions and the amounts payable for the 2015/16 season in the Employment Agreement dated 16 July 2013 (i.e. EUR1.500.000.- ) which is referred in the Article 1 of this Agreement”.

7. On 30 August 2015, the Club paid the Player the EUR 250,000 pursuant to Article 2a. of the Settlement Agreement.

8. On 30 September 2015, the Club paid the Player EUR 85,000 corresponding to the instalment due on that date pursuant to the Schedule.

9. On 31 December 2015, the Player notified the Club by letter that it had failed to comply with the Schedule in the Settlement Agreement. This correspondence stated that as more than 60 days had elapsed in relation to the payment due on 30 October 2015, the agreed amount payable under the Settlement Agreement was no longer valid and would be replaced by the original amount payable – i.e. EUR 1,500,000. The Player requested the payment of the entire amount of EUR 1,500,000 from the Club within ten days.

10. On 31 December 2015, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 October 2015 pursuant to the Schedule. The Player stated that he received this amount on 4 January 2016.

11. On 21 January 2016, further to his letter dated 31 December 2015 the Player wrote to the Club once again, stating inter alia, that pursuant to Article 3 of the Settlement Agreement, the Club owed the Player a total of EUR 1,500,000, not EUR 850,000. At the date of the letter, the Player stated that he was owed 5 instalments (i.e. August to December 2015) of EUR 150,000 each – totalling EUR 750,000. Accordingly, since the Club had only paid the Player a total of EUR

170,000 to date (i.e. two instalments of EUR 85,000 each), the Club still owed the Player EUR 580,000. The Player requested the payment of this outstanding amount within ten days.

12. On 29 January 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 December 2015 pursuant to the Schedule.

13. On 1 February 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 November 2015 pursuant to the Schedule.

14. On 8 February 2016, the Player lodged a claim before the Dispute Resolution Chamber of FIFA (the “FIFA DRC”).

15. On 29 March 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 31 January 2016 pursuant to the Schedule.

16. On 29 April 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 28 February 2016 pursuant to the Schedule.

17. On 27 May 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 March 2016 pursuant to the Schedule.

18. On 23 June 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 April 2016 pursuant to the Schedule.

19. On 25 July 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 May 2016 pursuant to the Schedule.

20. On 24 August 2016, the Club paid the Player EUR 85,000 corresponding to the instalment due on 30 June 2016 pursuant to the Schedule.

21. On 21 September 2017 the FIFA DRC rendered a decision on the claim filed by the Player (the “Appealed Decision”) as follows (emphasis in original):

“1. The claim of the [Player] is partially accepted.

2. The [Club] has to pay to the [Player], within 30 days as from the date of notification of this decision, the amount of EUR 650,000, plus 5% interest p.a. as follows:

a. 5% p.a. as from 31 October 2015 until 31 December 2015 on the amount of EUR 150,000;

b. 5% p.a. as from 31 December 2015 until the date of effective payment on the amount of EUR 65,000;

c. 5% p.a. as from 1 October 2015 until the date of effective payment on the amount of EUR 65,000;

d. 5% p.a. as from 31 August 2015 until 29 January 2016 on the amount of EUR 150,000;

e. 5% p.a. as from 29 January 2016 until the date of effective payment on the amount of EUR 65,000;

f. 5% p.a. as from 1 December 2015 until 1 February 2016 on the amount of EUR 150,000;

g. 5% p.a. as from 1 February 2016 until the date of effective payment on the amount of EUR 65,000;

h. 5% p.a. as from 31 December 2015 until 29 March 2016 on the amount of EUR 150,000;

i. 5% p.a. as from 29 March 2016 until the date of effective payment on the amount of EUR 65,000;

j. 5% p.a. as from 31 January 2016 until 29 April 2016 on the amount of EUR 150,000;

k. 5% p.a. as from 29 April 2016 until the date of effective payment on the amount of EUR 65,000;

l. 5% p.a. as from 29 February 2016 until 27 May 2016 on the amount of EUR 150,000;

m. 5% p.a. as from 27 May 2016 until the date of effective payment on the amount of EUR 65,000;

n. 5% p.a. as from 31 March 2016 until 23 June 2016 on the amount of EUR 150,000;

o. 5% p.a. as from 23 June 2016 until the date of effective payment on the amount of EUR 65,000;

p. 5% p.a. as from 1 May 2016 until 25 July 2016 on the amount of EUR 150,000;

q. 5% p.a. as from 25 July 2016 until the date of effective payment on the amount of [EUR] 65,000;

r. 5% p.a. as from 31 May 2016 until 24 August 2016 on the amount of EUR 150,000;

s. 5% p.a. as from 24 August 2016 until the date of effective payment on the amount of [EUR] 65,000”.

22. On 4 December 2017, the grounds of the Appealed Decision were notified to the parties.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

23. On 22 December 2017, in accordance with Article R47 of the Code of Sports-related Arbitration (the “CAS Code”), the Club filed a Statement of Appeal against the Appealed Decision with the Court of Arbitration for Sport (the “CAS”), requesting the following prayer for relief (emphasis in original):

“4. We request from the Court of Arbitration for sport the annulment of decision given by FIFA”.

24. In its Statement of Appeal, the Club requested the appointment of a sole arbitrator by the CAS.

25. On 29 December 2017, in accordance with Article R51 of the CAS Code, the Club filed its Appeal Brief, requesting the following prayers for relief:

“Because of the reasons stated above and the reasons taken into considerations by CAS panes [sic], we hereby request from CAS:

• to arrange date for hearing,

• to accept our appeal against the decision DRC dated on 21 September 2017,

• to overturn and set aside the abovementioned decision with all its consequences if this is not accepted, to accept mitigating circumstances and to make reasonable deduction from the compensation and interests.

• To condemn the respondent to pay the legal fees and other expenses of the Appellant in connection with the proceedings”.

26. On 30 December 2017, the Player wrote to the CAS Court Office rejecting the appointment of a sole arbitrator and requested a panel of three arbitrators to be appointed.

27. On 8 January 2018, the Player wrote to the CAS Court Office requesting that the time limit for the filing of his Answer be fixed after the payment by the Club of the advance of costs.

28. On the same date, the CAS Court Office wrote to the parties confirming that the Player’s deadline for submitting his Answer was set aside and would be fixed upon the payment of the advance of costs by the Club.

29. On 9 January 2018, the CAS Court Office wrote to the parties stating that the President of the CAS Appeals Arbitration Division had decided to submit the present procedure to a panel composed of three arbitrators. Consequently, the parties were invited to nominate an arbitrator from the list of CAS arbitrators within ten days.

30. On 12 January 2018, the Club wrote to the CAS Court Office nominating Prof. Ulrich Haas, Attorney-at-Law, Zurich, Switzerland, as an arbitrator.

31. On 17 January 2018, in accordance with Article R53 of the CAS Code, the Player nominated Mr Francesco Macri, Attorney-at-Law, Piacenza, Italy, as an arbitrator.

32. On 19 February 2018, in accordance with Article R55 of the CAS Code, the Player submitted his Answer and made the following requests for relief:

“1. To reject the appeal and to uphold the Challenged Decision;

2. To condem the Appellant to the payment in favour of the Respondent of the legal expenses incurred;

3. To establish that the costs of the arbitration procedure shall be borne by the Appellant”.

33. On 20 February 2018, the CAS Court Office wrote to the parties acknowledging receipt of the Player’s Answer. Further, the CAS Court Office noted that the Settlement Agreement contained a clause providing for the appointment of a sole arbitrator. Accordingly, the parties were invited to inform the CAS Court Office whether they agreed to proceed with a three person panel or wished for the appointment of a sole arbitrator.

34. On 21 February 2018, the Player wrote to the CAS Court Office stating that he did not feel a hearing was necessary in this case, and also stated that he wished for the hearing to proceed with the appointed panel of three arbitrators.

35. On 22 February 2018, the Club wrote to the CAS Court Office stating, inter alia, that it requested the appointment of a sole arbitrator as the Settlement Agreement expressly provided for it. The Club also reiterated its request for a hearing to be held in this matter.

36. On 27 February 2018, the CAS Court Office advised the parties that having been made aware of the provision in the Settlement Agreement for a sole arbitrator, the President of the CAS Appeals Arbitration Division had decided to submit the case to a sole arbitrator instead of a panel. Accordingly, pursuant to Article R54 of the CAS Code, the Sole Arbitrator appointed to this case was as follows:

Sole Arbitrator: Mr Mark A. Hovell, Solicitor, Manchester, England

37. On 9 March 2018, the CAS Court Office wrote to the parties informing them that pursuant to Article R57 of the CAS Code, the Sole Arbitrator had decided to hold a hearing in this matter. On the same date, the CAS Court Office wrote to FIFA on behalf of the Sole Arbitrator requesting a copy of the complete FIFA file relating to this matter.

38. On 14 March 2018, FIFA provided a copy of the complete FIFA file to the CAS Court Office. The CAS Court Office duly provided a copy of the file to the parties.

39. On 4 April 2018, the CAS Court Office provided the parties with an Order of Procedure.

40. On 5 April 2018, the Club and the Player wrote to the CAS Court Office providing their signed copies of the Order of Procedure.

IV. THE HEARING

41. On 12 March 2018, the CAS Court Office wrote to the parties confirming that a hearing would be held in this matter on 6 April 2018.

42. A hearing was held on 6 April 2018 at the Lausanne Palace Hotel in Lausanne, Switzerland. The parties did not raise any objection as to the appointment of the Sole Arbitrator. The Sole Arbitrator was present and was assisted by Ms Delphine Deschenaux-Rochat, Counsel to the CAS. The following persons attended the hearing:

i. The Club: Ms Jale Demir and Dr. Nihat Güman, both external counsel;

ii. The Player: Mr Gianpaolo Monteneri and Ms Anna Smirnova, counsel.

43. The parties then were given the opportunity to present their cases, to make their submissions and arguments and to answer questions posed by the Sole Arbitrator. The hearing was then closed and the Sole Arbitrator reserved his detailed decision to this written Award.

44. Upon closing the hearing, the parties expressly stated that they had no objections in relation to their respective rights to be heard and that they had been treated equally in these arbitration proceedings. The Sole Arbitrator has carefully taken into account in its subsequent deliberation all the evidence and the arguments presented by the parties, both in their written submissions and at the hearing, even if they have not been summarised in the present Award.

V. THE PARTIES’ SUBMISSIONS

45. The following summary of the parties’ positions is illustrative only and does not necessarily comprise each and every contention put forward by the parties. The Sole Arbitrator, however, has carefully considered all the submissions made by the parties, even if no explicit reference is made in what immediately follows.

A. The Club’s Submissions

In summary, the Club submitted the following in support of its Appeal:

46. The Club claimed that failure to pay the 30 October 2015 payment on time was due to the election of a new President and the appointment of a new management board at the Club. The Club was experiencing a financial crisis at the time with debts of EUR 100m. A new President would replace the previous one, but needed formally appointing. The new President and his new management board would not take office until January 2016, when the Club’s General Meeting confirmed their appointments. Once the General Meeting had been called, it was no longer possible for the Club to make payments until the new management were appointed as the Club’s accounts are published for the General Meeting and cannot be altered until its conclusion.

47. The Club also claimed that it prepared a protocol to deal with the late payments of 30 October 2015, 30 November 2015 and 30 December 2015 which would have provided for payments of EUR 120,000 to be paid on 30 January 2016 and a second payment of EUR 135,000 to be paid on 28 February 2016 to the Player to cover the unpaid amounts. However, the Club could not get the Player to sign this protocol.

48. The protocol was sent to Mr Toros, who the Club alleged to be the Player’s Turkish agent. All their correspondence was through Mr Toros and the Player’s address on the Employment Contract was c/o Mr Toros. The Club submitted that Mr Toros has indicated that the Player would sign the protocol, but when he didn’t, the Club had to pay the October instalment of EUR 85,000 on 31 December 2015.

49. The Club stated that it always intended to make the required payments to the Player according to the Settlement Agreement and stated that within the Club’s financial capacity it had acted in good faith. The Club did not feel that FIFA had recognised this in the Appealed Decision.

50. The Club also submitted that the Player did not act in good faith and “misused his position”, which were mitigating circumstances which the FIFA DRC did not take into account.

51. Further, the Club argued that the 30 October 2015 payment was made on 31 December 2015, which was at the end of the second month end. The Club’s position was that the Settlement Agreement should be interpreted that payments could only trigger Article 3 if they weren’t made by the last day of the month, 2 months after the due date. Further, it is the day that a payment is sent rather than when it is received that matters (the Player claims to have received the EUR 85,000 on 4 January 2016, but the Club produced the swift payment receipt from the bank showing it was made on 31 December 2015). The Club maintained that they were not in breach of the Settlement Agreement as they paid within the contractual deadline.

52. Additionally, at the hearing, the Club argued that Article 3 of the Settlement Agreement acted like a penalty clause, in that the Player still was able to leave the Club a year early and find work elsewhere, yet the Club had to pay him the entire balance of his Employment Contract. As such, the Club requested that the Sole Arbitrator use Swiss law to reduce the penalty clause and the sums awarded to the Player.

B. The Player’s Submissions

In summary, the Player submitted the following in support of his argument that the Appealed Decision should be upheld in its entirety:

53. The Player argued that Article 3 of the Settlement Agreement was clear that if the Club delayed the payment of any instalments by more than 60 days, the original terms of the Employment Contract would apply. Accordingly, the ‘mitigating circumstances’ submitted by the Club were irrelevant and did not affect the strict application of the relevant contractual provisions. At the hearing, the Player submitted that there was no need to interpret the Settlement Agreement. Article 3 referred to a payment being “60 days” late, not 2 months late. In any event, the payment would only count when received by the Player, which in the case of the 30 October 2015 instalment, was on 4 January 2016 – contrary to the Club’s assertions that this was paid on 31 December 2015. This was sent and received over 60 days from the due date. In any event, the payment was due on 30 October 2015 and at no point did the Club contact the Player to explain the delay in payment.

54. The Club have failed to provide any reasonable justification for its failure to comply with the contractual provisions and the agreed deadlines, and the internal election procedures could not amount to a valid excuse for delaying payment, nor were its financial problems the concern of the Player. He was not paid and his time with the Club effectively ended his career.

55. The Player acknowledged that the Club had paid him EUR 850,000 (which was the amount due under the Settlement Agreement) but not the remaining EUR 650,000 which was owed to him as a result of the Club’s breach of the Settlement Agreement.

56. So far as the protocol was concerned, the Player stated that Mr Toros was not his agent, rather he represented the Club. He never signed or agreed to sign the protocol.

57. At the hearing, the Player provided some context to the Settlement Agreement. During the second season of the Employment Contract, he experienced numerous delays in getting paid and was forced to train alone. He had been a French international player, but he was not playing for the Club, so a settlement was the only way to try and find regular football again. However, in case the Club violated the Settlement Agreement, Article 3 was negotiated. It is not a penalty clause. The Player had already reduced his entitlement from EUR 1.5m to EUR 850k under this arrangement and granted a 60 day grace period, but if the Club violated the Settlement Agreement, then it would simply go back to owing him the monies under the Employment Contract.