FC Lugano v. FC Internazionale Milano SpA

II. FACTUAL BACKGROUND

3. Below is a summary of the main relevant facts, as established on the basis of the written submissions of the parties, the hearing 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

4. On 23 January 2012, the Italian clubs, Parma FC (“Parma”) and Inter concluded an agreement for the transfer of Y., a football player of Ivorian nationality born on 20 January 1996 (the “Player”), from Parma to Inter for the amount of EUR 1,000,000, while the Player remained registered on loan with Parma for the rest of the season. Parma retained 50% of the Player’s economic rights valued at an extra EUR 1,000,000.

5. Also on 23 January 2012, at the age of 16, the Player and Inter entered into an employment relationship for the official federal minimum salary of EUR 29,000 per year.

6. On 19 June 2014, Inter acquired the remaining 50% of the Player’s economic rights from Parma for the amount of EUR 1,000,000.

7. In the 2013/2014 and 2014/2015 seasons, the Player regularly appeared in matches for Inter’s primavera team (Inter’s youth team).

8. In January 2015, the Player turned 19 and therefore became ineligible to play for Inter’s primavera team.

9. On 14 July 2015, following multiple previous extensions (on 1 July 2012, 20 June 2013, 1 November 2014), Inter and the Player entered into their fifth employment contract (the “Employment Contract”) for a period of three seasons, valid as from the date of signing until 30 June 2018. In accordance with the Employment Contract, the Player was entitled to a salary of EUR 115,750 for the 2015/2016 season and EUR 143,000 for the 2016/2017 and 2017/2018 seasons.

10. During the 2015/2016 season, the season of the Player’s 20 th birthday, the Player was loaned to the Italian club FC Crotone (“Crotone”) for free, which club participated in the Serie B at the relevant moment in time (the Italian second division). During this season, the Player participated in 33 official matches (30 in the Serie B and 3 in the Italian Cup), of which 30 in the starting eleven, while allegedly missing 10 matches due to an injury. At the end of the season, Crotone was directly promoted to the Serie A for the first time in its history.

11. In the loan agreement that was concluded between Inter and Crotone, the latter was granted an option to definitely buy the Player’s federative rights for EUR 1,000,000. Also, Inter was to pay “possible development fees” to Crotone for the amount of EUR 70,000 (EUR 50,000 after the 5th appearance, EUR 10,000 after the 10 th appearance and EUR 10,000 after the 15 th appearance).

12. At the start of the 2016/2017 season, after his loan spell with Crotone, the Player returned to Inter.

13. According to Inter, in July 2016, Olympique Gymnaste Club de Nice (“Nice”) expressed its interest in the Player’s services and the Player confirmed his interest in joining this club. At that moment, however, the Player had not been summoned to his youth national team and

therefore, according to French rules, he could not receive the necessary authorization to be registered for a French club.

14. According to Inter, towards the end of August 2016, Inter and the Player received an enquiry about the availability of the Player for a transfer on loan basis to Nice (the Player had been summoned sufficient times for his youth national team in the meantime). According to Inter, the Player and Inter gave their verbal consent to such transfer.

15. According to the Player, on 31 August 2016, i.e. the last day of the summer transfer window, Inter informed the Player’s agent about an offer received from Nice. On 31 August 2016, the Player was in a training camp with the Ivory Coast U21 national team. The Player declined the offer. According to the Player, this was due to the fact that he did not have the opportunity to properly evaluate the offer because it was drafted in English, a language he allegedly does not speak.

16. What is not in dispute is that, by 31 August 2016, Inter and Nice had negotiated the terms of a loan agreement that was finally never executed because, on the last date of the relevant transfer window, the Player refused leaving for Nice and indicated his preference to stay with Inter. Inter and Nice had agreed that Nice would receive the Player on loan for the 2016/2017 season against the payment of EUR 200,000 with an option to definitely acquire the services of the Player for a further amount of EUR 3,500,000 net at the end of the 2016/2017 season, while Inter would be entitled to annul such lifting by paying an amount of EUR 1,000,000 to Nice. Nice also committed itself to assuming the responsibility to pay the Player’s salary in accordance with the Player’s Employment Contract with Inter.

17. Although the Player was part of Inter’s A team during the 2016/2017 season and was regularly called upon as a substitute, the Player was not fielded in any of the 46 official matches played by Inter during this season. Never throughout the 2016/2017 season did the Player revert to Inter in connection with an alleged shortage of playing time.

18. On 7 June 2017, at the end of the 2016/2017 season, the Player informed Inter as follows: “During the season 2016/2017 that ended on 28 May 2017, I have not participated in any match with your Club. In addition to the detrimental nature that generates this situation, since for more than a year I have not participated in any competition, I cannot accept this situation anymore. Referring to the provisions of Article 15 of the FIFA Regulations for the Status and Transfer and Players, I am therefore sorry to have to give notice of the termination of my contract for sporting just cause since I participated in less than 10% of official matches played by the Club during this season given that I am an established professional. It is obvious that your Club has totally neglected me from a sporting point of view and that it is not interested in my services. As this rupture is deeply prejudicial to me, I reserve the right to claim compensation for the consequential damage.

In this regard, and unless you agree to intervene with your Club, which can be envisaged on the minimum basis of a total contractual freedom, I also reserve the right to refer to the FIFA Dispute Resolution Chamber or any other competent decision-making body”.

19. On 22 June 2017, as will be described in more detail below, the Player lodged a claim against Inter before the Dispute Resolution Chamber of FIFA.

20. During the summer 2017 transfer window, the Player received interest from several clubs amongst which SC Bastia and Nantes, both playing in the French Ligue 1.

21. On 20 July 2017, the Player and Lugano concluded an employment contract for one season, valid as from the date of signing until 30 June 2019 for a basic annual salary of CHF 100,000 net.

22. On 31 July 2017, upon Inter’s instructions, the FIGC denied the issuance of the Player’s International Transfer Certificate (the “ITC”).

23. On 17 August 2017, upon Lugano’s application and after the Player had already missed four matches with Lugano, the Single Judge of the Players’ Status Committee authorized the SFA to provisionally register the Player for Lugano.

B. Proceedings before the Dispute Resolution Chamber of FIFA

24. On 22 June 2017, the Player lodged a claim against Inter before the Dispute Resolution Chamber of FIFA (the “FIFA DRC”), requesting as follows:

• To acknowledge that the Player had “sporting just cause” to terminate his Employment Contract with Inter;

• To award the Player the amount of EUR 143,000 as moral damage;

• To acknowledge that Inter does not have any right to receive compensation from the Player.

25. On 10 August 2017, Inter rejected the Player’s claim in its entirety and lodged a counterclaim against the Player for the unjustified termination of the Employment Contract, requesting EUR 4,700,000 as compensation. Inter also requested Lugano, in its status as the Player’s new club, to be held jointly and severally liable with the Player.

26. Lugano rejected Inter’s claim in its entirety.

27. On 7 June 2018, the FIFA DRC rendered its decision (the “Appealed Decision”) with the following operative part: “1. The claim of the [Player] is rejected. 2. The counterclaim of [Inter] is partially accepted.

3. The [Player] is ordered to pay to [Inter], within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 133,532. 4. [Lugano] is jointly and severally liable for the payment of the aforementioned compensation. 5. If the aforementioned amount in accordance with point 3. is not paid within the above-mentioned time limit, 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. 6. Any further claim lodged by [Inter] is rejected. 7. [Inter] is directed to inform both the [Player] and [Lugano], 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”.

28. On 29 October 2018, the grounds of the Appealed Decision were communicated to the parties determining, inter alia, the following:

• […] [T]he Chamber proceeded to analyse the claim of the [Player], who alleges that he had sporting just cause to terminate the contract on 7 June 2017. In particular, the Chamber noted that, according to the [Player], he complied with all the conditions specified in art. 15 of the Regulations. Namely, i) he is an established professional, ii) he participated in less than 10% of Inter’s official matches and iii) he notified the termination within the 15 days following Inter’s last official match. The Chamber then noted that the above line of argumentation is shared by Lugano which argued that, by analogy with training compensation, since the [Player] played for almost every single match with Crotone during the 2015/2016 season, he has clearly achieved the status of established professional as per art. 15 of the Regulations.

• Conversely, the Chamber observed that Inter claimed that the [Player] did not have sporting just cause to terminate the contract as, according to Inter, it cannot be concluded that, at any given time, the [Player] could be considered as an established professional. In this regard, Inter stressed that, during the 2016/2017 season, there were far more experienced players in Inter’s squad than the [Player]. In this respect, the DRC noted that, according to Inter, in its squad there were a number of “established” players who played the same position as the player such as Joao Miranda, Jeison Murillo, Gary Mendel, Andrea Ranocchia and Marco Andreolli.

• […] As a first remark, the members of the Chamber recalled the conditions that need to be met in order for art. 15 of the Regulations to apply as correctly described by the [Player] […], and underscored that it is undisputed between the parties that the conditions ii) and iii) are met. Indeed, it is a fact that the player played less than 10% of Inter’s official matches during the 2016/2017 season and that he informed Inter about his decision to terminate the contract due to sporting just cause within the applicable time-limit, i.e. within the 15 days following Inter’s last official match.

• Consequently, the Chamber concluded that the only point left to address in order to determine whether the [Player] had sporting just cause to terminate the Inter contract is to establish whether he can be considered as an established professional in the sense of art. 15 of the Regulations.

• At this stage, the DRC deemed essential to point out that the analysis as to whether a player can be considered as an established professional in the sense of art. 15 of the Regulations should always be done

on a case-by-case basis. Indeed, the members of the Chamber highlighted that all the objective and subjective particularities of the specific case need to be analysed.

• In this context, the DRC stressed that the objective aspects include the age of the [Player] at the time of the termination, his performance and participation during the past seasons as well as his experience analysed vis-à-vis that of his teammates with similar characteristics. As to the subjective aspects, these include the [Player’s] perception and expectations that he might have regarding his participation in a given season depending on the club with which he is registered.

• Starting with the assessment of the objective particularities of the present matter, the DRC underlined first that, at the time of the termination of the Inter contract, the [Player] was 21 years old. As such, it would appear that his training and education period had, in principle, not ended yet. In this respect, the Chamber held that, although the [Player] apparently signed his first professional contract at the age of 16, it is also true that, whilst playing for Inter, he always participated in youth team matches. What is more, the Chamber outlined the fact that, during his loan to Crotone, Inter agreed to pay the latter certain fees depending on the number of matches that the [Player] would play with Crotone. In the Chamber’s view, this is clearly an indication that the purpose of the loan of the [Player] to Crotone was to further develop the [Player’s] skills.

• Along those lines, and while referring to Lugano’s analogy with training compensation and the concept of termination of a player’s training and education based on the number of matches played, the DRC underlined that in order for a player to be considered as an established professional, it needs to be concluded first and foremost, that his training and education period has ended. In other words, all established professionals in the sense of art. 15 of the Regulations should be considered as having ended their training period. Nevertheless, some players whose training period has ended may not be considered as established professionals due to their particular circumstances.

• Furthermore, it is also undisputed that Inter’s squad had, for that particular season, at least 4 other players with similar playing characteristics than the [Player] and who were older and more experienced than him. Indeed, it remained undisputed that those 4 players are or, at least were, regulars in their respective national teams. Conversely, the members of the Chamber noted that the [Player] has never been part of the A national team of Cote d’Ivoire.

• Regarding the subjective particularities of the matter at hand, or, in other words, the expectations that the [Player] had to participate with Inter during the 2016/2017 season, the DRC emphasised that at the beginning of said season, Inter and Nice had, in principle, agreed upon his temporary transfer to the French club. As such, in the DRC’s opinion, the [Player] should have been aware that his participation with Inter for that particular season was going to be limited. Moreover, the [Player] could not reasonably have expected that because he was a regular player in a Serie B club (Crotone) in the previous season, he was going to regularly participate with one of the most successful Serie A clubs.

• On account of all the above-mentioned considerations, and after an analysis of both the objective and subjective particularities of the present matter, the DRC came to the conclusion that, at the time the [Player] terminated the Inter contract on 7 June 2017, he could not have been considered as an established professional in the sense of art. 15 of the Regulations. In particular, the DRC was of the opinion that the argument regarding the number of matches that the [Player] played with Crotone in the season prior to the [Player] terminating his contract with Inter is insufficient to outweigh, in and of itself, the rest of the particularities of this matter as stressed above. Indeed, the DRC held that, at the time the player unilaterally terminated his contract with Inter, he was still a relatively young player in training and he

was still gaining experience with one of the top professional clubs in Europe, competing with other very experienced players, and could thus not reasonably expect that he would become a regular player of the said club within the season 2016/2017.

• Consequently, the members of the Chamber had no other option than to conclude that the [Player] did not satisfy one of the criteria of sporting just cause, i.e. that of being an established professional, and therefore that he did not have sporting just cause to terminate the Inter contract on 7 June 2017.

• As a final note, the DRC wished to stress that it was not blind to, and sympathised with, the frustration that the [Player] must have had due to his lack of participation with Inter during the 2016/2017 season. Nevertheless, the DRC was also of the opinion that in order to protect the cornerstone of professional football, namely, the principle of contractual stability, art. 15 of the Regulations, in particular the determination of whether a player can be considered as an “established professional”, needs to be interpreted narrowly and, as mentioned above, carefully considering the specificities of each particular case.

• In continuation, the DRC established that, since the [Player] did not have a just cause to terminate his contract with Inter, in accordance with art. 17 par. 1 of the Regulations, the [Player] is liable to pay compensation for breach of contract to the latter club. Equally, according to art. 17 par. 2 of the Regulations, his new club, i.e. Lugano, shall be jointly and severally liable for its payment.

• Along those lines, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. […]”.

• In doing so on the basis of Article 17(1) of the FIFA Regulations on the Status and Transfer of Players, “the DRC went to analyse the request of Inter. First, the Chamber noted that Inter requested EUR 4,700,000 mainly based on the purchase option contained in the loan agreement with Nice, on the buy-out clause contained in the contract of the [Player] with Lugano as well as on the [Player’s] age.

• In this respect, the members of the Chamber wished to recall that the loan agreement with Nice was signed at the end of the 2015/2016 season. This is, one year before the termination of the Inter contract. What is more, the DRC highlighted that the [Player] spent the subsequent season without participating in any official match. Therefore, such purchase option cannot possibly be considered as a basis for the payable compensation.

• As to the buy-out clause contained in the [Player’s] contract with Lugano, the members of the Chamber emphasised that such clause cannot serve as basis for the calculation of compensation either. Indeed, the DRC wished to emphasise that a buy-out clause generally does not accurately reflect the value of a player’s services nor the damage which the club suffers in case the player prematurely terminates the contract. It merely grants a right to a party, in casu the [Player], to opt out of his contract at any moment and without any consequences for the said party, in particular sporting sanctions.

• Furthermore, the allegation of Inter that due to the termination of the contract it lost all the investment made on the [Player] cannot be followed as Inter is, in principle, entitled to receive training compensation for the training and education of the [Player] since January 2012, when Inter and the [Player] signed their first employment contract.

• On account of all the above-mentioned considerations, the DRC concluded that the only objective criteria put at its disposal in the present matter in order to calculate any compensation due to Inter is the average

between the remaining value of the breached contract and the [Player’s] new contract during the same period of time, in accordance with its long-standing and well-established jurisprudence.

• In this context, the DRC established, on the one hand, that, at the time the [Player] terminated the contract, i.e. at the end of the 2016/2017 season, the Inter contract was to run for another entire season, i.e. the season 2017/2018. The contractual value for the latter seasons amounts to EUR 143,000, which constitutes the residual value of the 2017/2018 season. On the other hand, the Chamber noted that, for the same season, the [Player] was entitled to a total fixed remuneration of approximately EUR 105,000 with Lugano. On the basis of the aforementioned financial contractual elements, the Chamber concluded that the average of remuneration between the contracts concluded by the [Player] respectively with Inter and Lugano over the relevant period of time amounted to EUR 124,000.

• Furthermore, the DRC stressed that, as it remained undisputed that Inter paid the [Player] his salary for the month of June 2017 in the amount EUR 11,916, the pro rata part of said salary in the amount of EUR 9,532 needs to be included in the compensation.

• Consequently, on account of the afore-mentioned considerations, in particular the circumstances and the specificities of the case at hand, the Chamber decided that the [Player] must pay to Inter the amount of EUR 133,532, which is considered by the Chamber to be a fair and adequate amount as compensation for breach of contract.

• Furthermore, in accordance with the unambiguous content of article 17 par. 2 of the Regulations, the Chamber established that Lugano shall be jointly and severally liable for the payment of compensation.

• In this respect, the Chamber was eager to point out that the joint liability of a player’s new club is independent from the question as to whether this new club has committed an inducement to contractual breach and finds a clear legal basis in art. 17 par. 2 of the Regulations. This conclusion is in line with the well-established jurisprudence of the Chamber that was repeatedly confirmed by the Court of Arbitration for Sport (CAS). Hence, the Chamber decided that Lugano is jointly and severally liable for the payment of the relevant compensation.

• The Chamber concluded its deliberations by establishing and [sic] any other claim lodged by the parties is rejected”.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

29. On 19 November 2018, Lugano filed a Statement of Appeal with the Court of Arbitration for Sport (the “CAS”) against Inter with respect to the Appealed Decision, in accordance with Articles R47 and R48 of the 2017 edition of the CAS Code of Sports-related Arbitration (the “CAS Code”).

30. On 26 November 2018, Lugano requested the CAS Court Office to assign the arbitration to a sole arbitrator.

31. On 29 November 2018, Inter indicated to have no objection against referring the present arbitration to a sole arbitrator.

32. On 19 December 2018, Lugano filed its Appeal Brief in accordance with Article R51 CAS Code.

33. On 20 December 2018, upon being invited to express its view in this respect, FIFA renounced its right to request its possible intervention in the present arbitration.

34. On 28 December 2018, the Player filed a request for intervention in French, premised on Article R41.3 CAS Code.

35. On 10 January 2019, considering that the language of the present arbitration is English, Inter requested that CAS orders the Player to produce an English version of his request for intervention. Inter also requested the request for intervention to be dismissed because it was filed late and that, as the Player was a party to the proceedings leading to the Appealed Decision, the latter decision became final and binding on him. Permitting the Player to intervene would allow him to circumvent the res judicata effect of the Appealed Decision.

36. On 14 January 2019, Lugano agreed to the Player’s request for intervention and considered his participation essential. Lugano noted that in case the Sole Arbitrator would issue an award more favourable to Lugano than the Appealed Decision, there would be two contradictory decisions, for Lugano would remain jointly and severally liable with the Player in respect of the Appealed Decision. Lugano also requested that the Sole Arbitrator would decide on the request for intervention rather than the President of the Appeals Arbitration Division, so as to enable the Player a right to possibly contest an unlikely denial before the Swiss Federal Tribunal.

37. On 15 January 2019, Inter agreed that the Sole Arbitrator could decide on the request for intervention.

38. On 30 January 2019, in accordance with Article R54 CAS Code, and on behalf of the President of the CAS Appeals Arbitration Division, the CAS Court Office informed the parties that the arbitral tribunal appointed to decide the present matter was constituted as follows: - Mr Ulrich Haas, Professor of Law, Zurich, Switzerland, as Sole Arbitrator

39. On 1 February 2019, the CAS Court Office informed the parties that Mr Dennis Koolaard, Attorney-at-Law in Arnhem, the Netherlands, had been appointed as Ad hoc Clerk.

40. On 7 February 2019, the CAS Court Office informed the parties that the Sole Arbitrator had decided to reject the Player’s request for intervention and that the reasons for this decision would be provided in the final award.

41. On 13 March 2019, Inter filed its Answer in accordance with Article R55 CAS Code, including a request for production of documents.

42. On 19 and 21 March 2019 respectively, upon being invited to express their views in this respect, Inter indicated that no hearing would be needed, whereas Lugano indicated to prefer

a hearing being held. Lugano also requested that a single hearing day would be set for the present arbitration and the proceedings referenced CAS 2019/A/6096 since these proceedings are directly linked to each other and that the two matters are conducte d by the same Sole Arbitrator.

43. On 21 March 2019, the CAS Court Office informed the parties that the Sole Arbitrator had decided to hold a hearing and that the present arbitration and the proceedings referenced CAS 2019/A/6096 would be heard consecutively on the same date.

44. On 25 March 2019, upon being invited to comment, Lugano objected to Inter’s request for production of documents.

45. On 26 March 2019, Lugano requested Inter and CAS to evaluate the possibility to convene the hearing in Milan, Italy.

46. On 17 April 2019, following Inter’s consent, the CAS Court Office confirmed on behalf of the Sole Arbitrator that the hearing would be held in Milan, Italy.

47. On 27 and 30 April 2019 respectively, Inter and Lugano returned duly signed copies of the Order of Procedure to the CAS Court Office.

48. On 27 May 2019, the CAS Court Office informed the parties that the Sole Arbitrator had decided to reject Inter’s request for production of documents and that the reasons for this decision would be set out in the final award.

49. On 4 June 2019, a hearing was held in Milan, Italy. The hearing in the present proceedings took place consecutively with the proceedings referenced CAS 2019/A/6096. At the outset of the hearing, both parties confirmed not to have any objection as to the constitution and composition of the arbitral tribunal.

50. In addition to the Sole Arbitrator, Mr Antonio de Quesada, Head of Arbitration to the CAS, and Mr Dennis Koolaard, Ad hoc Clerk, the following persons attended the hearing: a) For the Appellant: 1) Mr Luca Baldo, General Secretary; 2) Mr Luca Tettamanti, Counsel; 3) Mr Alberto Roige Godia, Co-Counsel; 4) Mr Luca Canuto, Interpreter. b) For the Respondent: 1) Mr Gianpaolo Monteneri, Counsel; 2) Mr Angelo Capellini, Counsel.

51. The Sole Arbitrator heard evidence from the following persons, in order of appearance:

1) Mr Giovanni Manna, Technical Director of Lugano, witness called by the Appellant (in person); 2) The Player, witness called by the Appellant (by telephone).

52. At the start of the hearing, Inter objected to the testimony of Mr Manna. Inter argued that the main question in the present arbitration is whether the Player had “sporting just cause” to terminate his Employment Contract with Inter. All the relevant factual circumstances occurred before the Player joined Lugano. Inter submitted that Mr Manna can therefore not be heard as a witness, but that he should be regarded as a party representative.

53. Inter also objected against the Player’s testimony as he has an interest in the present proceedings. If he wanted to challenge the Appealed Decision he should have filed his own independent appeal.

54. Lugano answered that the relevance of Mr Mana’s witness testimony is to be assessed by the Sole Arbitrator. Lugano indicated that it called Mr Mana as a witness to testify about the Player’s period with Lugano. Lugano argues that Mr Mana is not a party representative, because he is an employee. Lugano is the party to the present dispute.

55. As to the Player, Lugano argued that it was not entirely sure whether the Player had accepted the Appealed Decision, because there had been a misunderstanding with his appeal and he tried to intervene in the present arbitration. Lugano insisted on hearing the Player as a witness and that it would subsequently be up to the Sole Arbitrator to assess the relevance of his testimony.

56. The Sole Arbitrator then decided to allow the testimony of Mr Manna as well as the Player and indicated that he would decide on the status of these two witnesses in the final award.

57. Both witnesses were invited by the Sole Arbitrator to tell the truth subject to the sanctions of perjury. Both parties and the Sole Arbitrator had the opportunity to examine and cross-examine the witnesses.

58. Although Lugano initially also called Mr Jean-Jacques Bertrand, lawyer of the Player, as witness, at the hearing Lugano renounced hearing such witness.

59. Both parties had full opportunity to present their case, submit their arguments and answer the questions posed by the Sole Arbitrator.

60. Before the hearing was concluded, both parties expressly stated that they did not have any objection with the procedure adopted by the Sole Arbitrator and that their right to be heard had been respected.

61. The Sole Arbitrator confirms that he carefully heard and took into account in his decision all of the submissions, evidence, and arguments presented by the parties, even if they have not been specifically summarised or referred to in the present arbitral award.

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

62. The submissions of Lugano, in essence, may be summarised as follows: - The FIFA DRC erred in limiting the scope of its analysis to Article 15 FIFA RSTP and the existence of a “sporting just cause”. Article 17 FIFA RSTP also plays an important role in this matter.

a) As to the “sporting just cause” under Article 15 FIFA RSTP

• The FIFA DRC correctly held that two out of the three criteria set out in Article 15 FIFA RSTP were met. However, the FIFA DRC ruled that the third criterion was not existing in this case, namely that the Player was not an “established professional”. Should CAS consider otherwise, no compensation is payable by FC Lugano to Inter for the Player’s termination of his Employment Contract.

• The starting point is that the FIFA RSTP does not provide for a definition of an “established professional”. The assessment of whether a player is to be considered an “established professional” is to be made on the basis of the criteria developed in the jurisprudence of CAS, in particular on the basis of CAS 2007/A/1369, where it was held that a 22 year old player who had played 27 matches in Bulgaria and then 19 partial matches in Russia was considered an “established professional”, whereby the player’s salary compared to his age was taken into account.

• The fact that the Player played 33 official matches for Crotone in the Serie B and that his salary had increased from EUR 29,000 to EUR 143,000 per year are indicative of the big talent of the Player, even before he was loaned to Crotone, and that he was far from being considered as a normal young footballer of Inter’s youth sector or a player still under training.

• FIFA created an artificial set of “objective” and “subjective” aspects to apparently check whether the Player was an “established professional”. These aspects are not listed in any rule or provision related to such concept.

• As to the first “objective criterion” taken into consideration by the FIFA DRC, i.e. the Player’s age, the FIFA DRC gave inappropriate and erroneous weight to the Player’s age in the Appealed Decision. Inappropriate because a presumption exists that the conclusion of the training period occurs when a player reaches the age of 21.

• Reference is made to CAS jurisprudence in accordance with which a player’s training period is to be considered as having ended before the start of the season in which the player concerned becomes a regular player for the club concerned. In the matter at hand, the FIFA DRC disregarded the 33 matches played by the Player in a highly competitive league one entire season before his termination letter.

• The FIFA DRC also gave erroneous weight to the “valorization prizes” offered by Inter to Crotone during the Player’s loan to allegedly support his fielding as a sign of Inter’s

will to “further develop his skills”. The fact that Crotone fielded the Player in the starting eleven in 30 out of the 33 matches, while the “valorization prizes” only applied until 15 matches irrespective of the minutes played, mean that Crotone considered him ready to play without the need of any incentive.

• As to the second “objective criterion” taken into consideration by the FIFA DRC, i.e. the Player’s performance and participation during the past seasons, the FIFA DRC did not perform any check of the Player’s actual performances or recognised status at that time. In the 2015/2016 season, Crotone was the team with the lowest number of losses and second with lowest number of goals conceded. The Player also received recognition of some relevant media. It should be taken into account that the Player played in total six seasons as a professional before terminating his Employment Contract. The level of the Serie B can be perfectly equated to the first tier of numerous other football associations. Also the offer received by Inter from Nice, a French Ligue 1 club, for a loan of the Player against EUR 200,000 and an option to buy him for EUR 3,500,000 denotes the level the Player had at the end of Crotone’s 2015/2016 season.

• As to the third “objective criterion” taken into consideration by the FIFA DRC, i.e. the Player’s experience vis-à-vis that of his teammates, this goes hand in hand with the “subjective criterion”, meaning the expectations that the Player had to participate with Inter during the 2016/2017 season. The fact that the Player had four teammates with similar characteristics but that were older and regular players of their respective national teams, has nothing to do with the status of the Player as an “established professional”. It is not because a professional is established in the Italian Serie B and not in the Serie A that he cannot enjoy the prerogatives of Article 15 FIFA RSTP. The offer received by Nice proves that the Player was a “name” in the international market. The Player did not have to be a regular starter with Inter, because there is “a long path” between being regular and to play at least 10% of the official matches. The fact that the Player was never called up for his national team is irrelevant in the case at hand. Being an “established professional” does not mean that he should be an “established international professional”.

b) As to the “just cause” under Article 17 FIFA RSTP

• On a subsidiary basis, the “reckless attitude” of Inter towards the Player shall lead to the same legal consequences under the perspective of Article 17 FIFA RSTP, which argument was simply ignored by the FIFA DRC in the Appealed Decision.

• Inter displayed a lack of genuine interest in retaining the Player. With reference to Article 328 of the Swiss Code of Obligations (the “SCO”), prominent doctrine clarified that there are professions where the employees need to be active in their posts. Professional football players are included in this group. In the present case, what Inter did against the Player was a de facto deregistration, and the deregistration of a football player has been held to be decisive in the jurisprudence of the FIFA DRC and CAS. The de facto deregistration endangered the Player’s career by blocking and preventing him to compete at all (sic!) during the course of an entire season which was fundamental for his future development.

c) As to the compensation granted by the FIFA DRC in the Appealed Decision

• In the unlikely event that CAS would consider that the Player did not have “(sporting) just cause” to terminate the Employment Contract, FIFA erred also in granting any compensation to Inter or, at least, not to set it at a proportionate level.

• By calculating the compensation due on the average between the remaining value of the Employment Contract and the Player’s new employment contract with Lugano, the FIFA DRC did not apply the correct approach to determine the alleged and unproven damages suffered by Inter. Only the non-amortised part of the transfer fee paid to acquire the services of the Player could be taken into account as proven damage.

• With reference to CAS jurisprudence, no compensation should be awarded because Inter did not show any interest in keeping the Player, developing his qualities, allowing him to compete or offering him a renewal of his Employment Contract. Inter simply put the Player in a corner and abandoned him for an entire fundamental season for his career. Under such circumstances, an employer cannot be compensated.

• Finally, if not a zero-compensation situation, Inter’s attitude is surely an aspect to consider to fairly reduce the compensation granted by the FIFA DRC.

63. On this basis, Lugano submits the following requests for relief: “i. The appeal filed by FC Lugano SA is upheld; ii. The Challenged Decision is set aside and annulled. iii. FC Lugano SA shall not have to pay any amount to FC Internazionale Milano SpA. On a subsidiary basis iv. Only in the case CAS considers that FC Lugano SA has to pay any amount to FC Internazionale Milano SpA, such amount of compensation is highly reduced according to all the arguments set forth by FC Lugano SA in this submission. In any case v. FC Internazionale Milano SpA shall bear all the procedural costs of this arbitration procedure. vi. FC Internazionale Milano SpA shall compensate FC Lugano SA for all the legal fees and other costs incurred in connection with this arbitration in an amount to be determined at the discretion of the Panel”.

B. The Respondent

64. The submissions of Inter, in essence, may be summarised as follows:

a) As to the “sporting just cause” under Article 15 FIFA RSTP

- At all times Inter duly and faithfully carried out its obligations as an employer. At the same time, at no stage did the Player express any dissatisfaction of sporting and/or financial reason towards Inter.

• Besides the three cumulative criteria that must be complied with in order to consider a football player as an “established professional” in the sense of Article 15 FIFA RSTP as mentioned by the Player, Inter maintains that “the Player’s personal circumstances” shall also be taken into consideration as a fourth and separate cumulative criterion, which is in accordance with CAS 2007/A/1369 and the assessment of the FIFA DRC in the Appealed Decision.

• The Player was not yet an “established professional”, although Inter at all times to the best of its endeavours promoted the Player’s development within its squads. For instance, Inter paid an incentive to Crotone in order to ensure the Player’s participation in official championship matches of the Serie B.

• In Italy, contrary to many other European countries, first division clubs do not have a second team and consequently there is no championship for second teams and/or reserve teams that play a “parallel” championship to the first team. In Italian football there is only the primavera championship, in which only players between 15 and 19 can participate. As a consequence, when players reach the age of 19 it is usual that almost all these players go on loan to a Serie B club in order to have the possibility to develop and play regularly.

• It is obvious that the football conditions of the Serie B and the quality of the squads drastically differ from those at the Serie A level. The matches played with Crotone make the Player a good and promising one, with potential for the future; however, this does not mean that after one season spent with other young players in the Serie B made the Player an “established player” immediately capable to compete in the first division squad of Inter. Inter even financed the Player’s loan additionally to stimulate Crotone for regular fielding of the Player in its matches.

• While being able to be loaned to Nice, the Player at the very last moment declined to move to Nice where he had more opportunities to play. The Player chose to remain with Inter where he knew that he did not have many chances to play because on his position there were already established players such as Joao Miranda (captain of the Brazilian national team), Jeison Murillo (regular player of the Colombian national team), Gary Medel (regular player of the Chilean national team), Andrea Ranocchia (Italian national team player) and Marco Andreolli. It was therefore clear for the Player that the more experienced and already established players were those who were regularly playing in official matches for Inter, whereas he had the role of a substitute. The Player was regularly included in the match list of Inter, which is already a big recognition of the qualities of the Player and represents the intention of Inter to develop the Player further in order for him to eventually reach the highest standard.

• The Player turned 21 on 20 January 2017. As, according to the FIFA RSTP, “a player’s training and education takes place between the ages of 12 and 23”, the Player’s training and education could not be considered completed at the moment he terminated the Employment Contract. An “established player” is first of all a player who has terminated and completed his training period. The Player was still in the period of his training and had not yet reached the similar level of skills comparable to those of his teammates of the first squad of Inter.

• Despite the fact that Crotone was promoted to the Serie A at the end of the 2015/2016 season, it did not make use of the purchase option in the loan agreement with Inter to definitely acquire the services of the Player. This demonstrates that Crotone clearly did not evaluate the sporting level of the Player as being good enough for the Serie A, since otherwise it would have made at least an effort to retain him for the future. Instead, Crotone preferred to hire the older and more experienced players Noë Dussenne and Massimo Ceccherini as central defenders.

• While Inter put lots of efforts into developing the Player, so as to ensure that at the end of the training period, on the day the Player could be considered as an “established player”, it could eventually have a sporting return from the investments made up to that moment. The Player, however, betrayed the trust put in him by terminating the employment relationship by falsely alleging “sporting just cause”.

• The jurisprudence cited by Lugano in respect of the end of the training period is not relevant for the matter at hand, because these cases concern training compensation and not the notion of an “established player”. Having completed the training period is not sufficient for the recognition of a player as an “established player”, which was also highlighted by the FIFA DRC in the Appealed Decision.

• As to whether the incentives paid by Inter to Crotone were not necessary to encourage Crotone to field the Player, it is hypothetical and useless to guess at this stage whether Crotone would have given the same playing opportunities to the Player without such incentive.

• The 6-year professional employment relationship is not an indication that the Player is an “established professional”. This rather shows that since the Player was aged 16, Inter not only cared about the Player and contributed to his development, but also relied on his future performance and wanted to retain his services by properly rewarding him.

• With reference to CAS 2007/A/1369, the Sole Arbitrator in such case considered that “the termination of an employment contract for sporting reasons cannot be accepted on the basis of mere compliance with formal requirements referred to above, unless the player has during the performance of his employment contract made the Club aware of his dissatisfaction with the fact that he is not actively participating in the team’s games”. In the present matter, the Player never until providing Inter with his termination letter, expressed his discontent.

• As to the Player’s performance with Lugano, out of the 32 matches, he started in 7 matches, entered the squad as a substitute in 18 matches and was not inserted in the squad in 7 matches. Accordingly, bearing in mind the foregoing, one can observe that even for a middle size club like Lugano, playing in a minor championship like the Swiss one, the Player does not appear to be included in the group of established players that play regularly and in the starting eleven. The Player rather remains with the group of players that are inserted at the end of the match to collect some experience useful for the future development.

b) As to the “just cause” under Article 17 FIFA RSTP

• The Employment Contract clearly determined the mutual obligations of the Player and Inter. No claims or protests as to Inter’s compliance with the Employment Contract were ever received. Inter was deeply astonished when faced with the reluctance of the Player to continue his career with Inter.

• Lugano’s references to the deregistration of players have nothing to do with the relationship between the Player and Inter and every comparison is simply misplaced.

• By the time of the termination of the Employment Contract, the Player and Lugano had most likely already agreed on the terms of their employment relationship for a long time and only in a second stage officially signed the contract. Such conduct on the side of Lugano represents an obvious inducement for the Player to breach the Employment Contract.

c) As to the compensation granted by the FIFA DRC in the Appealed Decision

• It is worthy to remind that while establishing an amount of compensation on the basis of Article 17 FIFA RSTP, it is essential to focus first of all on the principle of positive interest. Inter acquired the rights for the Player from Parma for a transfer compensation of EUR 2,000,000, which represents a big financial investment considering the young age of the Player at the time.

• Under the loan agreement concluded between Inter and Nice, Inter was to receive a guaranteed loan fee of EUR 200,000. The value of the services of the Player for one single season were therefore worth at least EUR 200,000 at the end of August 2016. Considering that the Player spent the entire 2016/2017 season with the first squad of Inter, gaining experience, the value of his services for one season clearly became much higher. In case Nice would have liked to permanently register the Player, a net amount of EUR 3,500,000 would be payable to Inter. This represents the real current market value of the Player. Although the Player did not reach an agreement with Nice, Inter and Nice had signed the loan agreement, with such purchase option. The investments made by Inter in the Player’s development was reflected in the amount of transfer compensation potentially payable to Inter in case of a definite transfer to Nice.

• Also the fact that the Player’s salary with Lugano is higher than his salary with Inter demonstrates that that the Player clearly had financial motivations to breach his Employment Contract with Inter.

• The amount of EUR 1,000,000 adopted in the Addendum to the Player’s employment contract with Lugano, which can be increased in accordance with the “Warranty Agreement”, represents the value that these two parties gave to the services of the Player.

65. On this basis, Inter submits the following requests for relief: “1. To reject the appeal; 2. To uphold the Challenged Decision;

3. To condemn the Appellant to the payment in favour of the Respondent of the legal expenses incurred; 4. To establish that the costs of the arbitration procedure shall be borne by the Appellant;”