Danilyuk Mikhail v. FC Shinnik

II. FACTS

2.1. On 10 August 2011, Mr Danilyuk and the Club concluded an Agency Agreement (hereinafter referred to as “Contract”). The Contract was registered by the Commission of the RFU on Operations of Football Players’ Agents No 058-022 with stamp of 9 August 2011. According to Article 1.1 of the Contract Mr Danilyuk was hired as the Club’s agent to provide legal and factual action on behalf of the Club, in particular “hold negotiations with the professional sportsman

[K.] (hereinafter referred to as the “Professional Sportsman”) [hereinafter referred to as “the Player”] with a view to enter into an employment agreement between the Professional Sportsman and the Club on the conditions, specified by the Club”. Article 1.2 of the Contract specified that the services under the Contract “shall be deemed rendered, provided the Club and the Professional Sportsman enter into an employment Agreement”.

2.2. Mr Danilyuk organized the transfer of the Player to the Club. On 16 August 2011, the Club and the Player entered into an employment agreement.

2.3. This fact and the fact that Mr Danilyuk “fully performed his obligations to the Club within the terms specified” was confirmed by an Act to the Agency Agreement dated 16 August 2011 and signed by Mr Danilyuk and the Club (hereinafter referred to as the “Act”). By Article 1.2 of this Act the Club “accepted the requested scope of works (services) and does not have any claims with regard to the terms and the scope of the works carried out”. Article 2.1 of the Act specified that the “sum payable by the Club to the Agent amounts to 50,000 (fifty thousand) US dollars (not subject to VAT). It is to be transferred in rubles until 15 October 2011 at the exchange rate of Russia’s Central Bank on the payment date”.

2.4. The sum specified in Article 2.1 of the Act corresponds to the remuneration provision of Article 3.1 of the Contract. According to the latter provision an additional remuneration determined by Articles 3.5 and 3.6 of the Contract has been agreed upon. Article 3.5 of the Contract provides that in case “the Professional Sportsman participates in the official games of the Club in the Russian football championship of the sport season 2012 – 2013, sport season 2013 – 2014, the Club shall pay to the Agent an additional remuneration in the amount of 50,000 (fifty thousand) US dollars per each such season. The Club shall pay this additional remuneration in the form of a prepayment until the 15 th day of the month following the month of the expiration of the registration period (transfer window) in Russia. The said remuneration is not to be paid to the Agent for the sports season, in which the Professional Sportsman does not play for the Club”. Article 3.6 of the Contract provided for another additional remuneration in case of a transfer of the Player to another sport football club before the expiration of the employment agreement with the Club.

Article 3.2 of the Contract reads as follows:

“The payment of the Agent’s remuneration shall be carried out after conclusion of the Act of execution of the services which is to be signed by the authorized representatives of the parties”.

2.5. On 15 July 2013 the Club duly paid the sum of 50,000 US Dollars according to Article 3.1 of the Contract and Article 2.1 of the Act to the Contract, but did not pay the sum of another 50,000 US Dollars provided for under Articles 3.1 and 3.5 of the Contract, which was requested by Mr Danilyuk since the Player was fielded two times in the sports season 2012 – 2013 (Sibir – Shinnik, Enisey – Shinnik). In all other 15 matches of this season the Professional Sportsman was in reserve.

2.6. On 17 April 2014, Mr Danilyuk submitted a complaint to the Club by telegraph message and set a deadline for payment until 23 April 2014. Mr Danilyuk reserved his right to petition to the RFU – FIFA in case of non-payment by the set deadline.

2.7. On 29 May 2014, Mr Danilyuk lodged a claim at the Dispute Resolution Chamber of the RFU (“Palata po razresheniyu sporov”, National Dispute Resolution Chamber, hereinafter referred to as “NDRC”), since the Club did not pay the required sum.

2.8. On 4 August 2014, the Club filed a reasoned statement of defence before the NDRC and argued that Mr Danilyuk in fact has not participated in the transfer of the Player to the Club. The Club relied on a witness statement of the Player who declared that his employment agreement has been signed with participation of his representative Muminov Kakhor and that he was not familiar with any other agreements (agency agreements) serving as a prerequisite for his transfer. The Club argued that the agreement between the Club and Mr Danilyuk was “a sham transaction, as it was entered into without the intention to create legal consequences corresponding to it”. Further to that the Club submitted that Mr Danilyuk was no licensed agent and, thus, had no right to petition to the NDRC.

2.9. On 14 August 2014, the NDRC decided that it had jurisdiction because it was a dispute on the violation of conditions under agreements entered into with licensed football agents and that the conditions for payment of the additional remuneration set by Article 3.5 of the Contract had been fulfilled and that the Club, therefore, had to pay to Mr Danilyuk the additional remuneration in the amount of 50,000 US Dollars in rubles, at the exchange rate of Russia’s Central Bank as of the payment date and that such payment shall take place within 30 days of the entry into force of the NDRC’s decision. Further to that, the Club was ordered to pay to Mr Danilyuk the charge for consideration of the claim by the NDRC in the amount of 15,000 rubles within 30 calendar days.

2.10. The Club appealed from the decision of the NDRC to the Players’ Status Committee of the RFU (hereinafter referred to as “PSC”) and repeated its arguments from the first instance procedure. In the Club’s view, the agreement concluded with Mr Danilyuk was an imaginary deal. Practically, Mr Danilyuk asked for payments for actions he did not perform. At the hearing before the PSC, the Club’s Sports Director S.V. Korovkin explained that it was him who, as the person responsible, had gathered all information on the Player and had conducted further negotiations concerning his transfer. The obligation to participate in sporting events is already covered by Article 3.1.2 of the Employment Agreement. Mr Danilyuk, thus, was asking twice the same fee for the same action, namely the athlete’s participation in official games.

2.11. The Club finally reiterated that the agent would not be licensed and that he hence has not the right to bring a claim before the RFU bodies.

2.12. By decision of 3 October 2014, handed over in full to Mr Danilyuk on 14 January 2015 (hereinafter referred to as “Appealed Decision”), the PSC entered into the merits of the case without expressing any reservation on the Appellant’s ability to bring its case before the RFU, granted the appeal and dismissed Mr Danilyuk’s claim concerning the additional payment of 50,000 US Dollars. The PSC referred to Article 3.2 of the Agency Agreement.

2.13. In the Appealed Decision the PSC indeed found that “in violation of Clause 1, Article 1008 of the Civil Code of the Russian Federation, the Agent did not furnish the Club with an Agent report, the parties did not conclude an additional Act of Completed work (Clause 3.2 of the Agency Agreement), which would have been a reason for payment of an additional fee. The Agent’s obligation to execute and submit its reports is mandatorily established by Article 1008 of the Civil Code of the Russian federation, and the Agent shall fulfil it due to the requirements of Article 309 of the Civil Code of the Russian Federation (and) Article 422 (of) the Civil Code of the Russian Federation”. Secondly, the PSC concluded that “the Agent’s demand for an additional fee under the considered agreement is unjustified, as the terms of Clause 3.5. of the Agency Agreement found no ground for payment of money to the Agent, but merely repeat the subject of the Agent’s core service, for which the latter has already received a fee in full. Pursuant to the Agency Agreement, the Agent obtains the right to a fee as a consequence of setting of labour relations between the Club and the Football Player. As such relation(s) were set, and pursuant to the Act of August, 16, 2011 the Agent and the Club (had) agreed with the exhaustion of the agency function and full payment of the fee due, the Agent’s further claim means a demand of repeated payment for the same actions. During decision making, the Committee also gives attention to the fact that the Football Player himself knew nothing of the Agent’s participation in his employment. This circumstance could indicate sham of the considered Agency Agreement in full. However, the Parties raised no claims concerning the fee paid previously”.

III. PROCEEDINGS BEFORE THE CAS AND EVENTS DURING THESE

PROCEEDINGS

3.1. On 19 January 2015, Mr Danilyuk submitted his Statement of Appeal against the PSC’s decision in accordance with Articles R47 and R48 of the Code of Sports-related Arbitration (hereinafter referred to as “the Code”).

3.2. On 27 January 2015, the Counsel to the CAS forwarded the Statement of Appeal to the Respondent, informed on the deadline for the Appeal Brief and asked the Club by a deadline of 5 days whether it agrees to the appointment of a sole arbitrator.

3.3. On 4 February 2015, the Club objected to the Statement of Appeal and submitted a letter signed by the Player which reads as follows:

“Explanation About the circumstances of signing the Employment Agreement between me and NP FC ‘Shinnik’ in person of General Director Rozhnov A.A: I can explain the following: the Employment Agreement was sign(ed) between me and the Club (on) 16 August 2011 after the expiration of my Contract with FC Zhemchuzhina, as I was a “free Agent” after discontinuation of mentioned FC. Signing the Employment Agreement, its text and conditions were examined by my representative Muminov Kakhor, who assists me in this procedure. I knew nothing about the participation of any other Agents in my transfer”.

3.4. By letter of the same day, the Counsel to the CAS advised the Club that it had not been invited yet to express its position on the merits of the case. This will happen after receipt of the Appeal Brief. But the Counsel to the CAS reiterated her request of 27 January 2015 to comment on the appointment of a sole arbitrator requested by Mr Danilyuk.

3.5. Since no objection from the Club arrived within the set deadline, the Counsel to the CAS informed the parties by letter dated 9 February 2015 of the decision of the President of the CAS Appeals Arbitration Division to appoint a sole arbitrator.

3.6. In accordance with Article R51 of the Code, Mr Danilyuk filed his Appeal Brief on 13 February

2015.

3.7. By letter of the Counsel to the CAS of 17 February 2015, the Club was notified the Appeal Brief, including exhibits and granted a deadline of 20 days from receipt of the letter to submit its answer.

3.8. On 6 March 2015, Mr Michael Geistlinger, professor in Salzburg, Austria, was appointed as Sole Arbitrator in this case.

3.9. On 20 March 2015, the Club filed its Answer by fax and, thus, missed the deadline of 20 days from the day of delivery of the Appeal Brief to it, which was 19 February 2015. The deadline, thus, was 11 March 2015. The Club did not express any grounds for the late filing of its answer, neither in the answer itself, nor on or before 25 March 2015, as it has been invited to do so by letter of the Counsel to the CAS dated 20 March 2015. Since Mr Danilyuk objected to the admissibility of the Respondent’s Answer and the Club did not provide any reasons for its late filing, the Sole Arbitrator decided to exclude the Respondent’s Answer from the CAS file. This decision was communicated to the parties on 31 March 2015 and they were given a deadline of 9 April 2015 to inform the CAS Court Office whether they prefer a hearing to be held in this matter or for the Sole Arbitrator to issue an award based solely on the parties’ written submissions.

3.10. On 1 April 2015, Mr Danilyuk, and on 7 April 2015, the Club informed the CAS Court Office on their preference to have no hearing held in this matter and that the Sole Arbitrator shall decide the case based on the submissions in writing.

3.11. On 22 April 2015, Mr Danilyuk, and on 24 April 2015, the Club signed the Order of Procedure and agreed that the Sole Arbitrator will render a decision on the case based on their submissions in writing.

IV. SUBMISSIONS OF THE PARTIES — A. THE APPELLANT:

4.1. Mr Danilyuk bases the jurisdiction of CAS on Article R47 of the Code read together with Article 47 of the RFU Statutes and Article 53 of the RFU Regulations on Dispute Resolution. The Statement of Appeal and the Appeal Brief were submitted in time and fulfilled all other requirements. Thus, CAS holds jurisdiction and the appeal is admissible.

4.2. Referring to Article R58 of the Code, to Article 1 para 1 of the FIFA Players’ Agents Regulations 2008 (hereinafter referred to as “FIFA PAR”) and Article 2 of the Preamble to the RFU Players’

Agents Regulations 2010 (hereinafter referred to as “RFU PAR”) as well as Article 7.1 of the Contract, Mr Danilyuk holds that the FIFA PAR and RFU PAR shall apply as lex specialis and prevail over any general rules, including those contained in the legislation of the Russian Federation, except for binding ones. Russian law shall supply subsidiarily.

4.3. As to the merits, Mr Danilyuk proposes to CAS to proceed by answering the following questions in their order: “1) Whether the services were rendered by the Agent? If the answer to the first question is affirmative, then 2) Whether the option of additional remuneration stipulated in art. 3.5 of the Contract is valid? If the answer to the second question is affirmative, then 3) Whether the Agent is entitled to receive the additional remuneration? If the answer to the third question is affirmative, then 4) What is the amount of the additional remuneration?”.

a) Services under the Contract were rendered by the agent 4.4. Mr Danilyuk refers to Article 1.1 of the Contract which obliged him to hold negotiations with the Player with the purpose of concluding an employment agreement between the Player and the Club on the conditions set by the Club. Such employment agreement was entered on 10 August 2011. According to Article 1.2 of the Contract the conclusion of the employment agreement was enough in order to have the services under the Contract being considered as performed. Since Article 3.2 of the Contract requires that an act of execution of the services must be concluded in order to have the remuneration provided by the Contract paid, Mr Danilyuk and the Club signed the respective Act on 16 August 2011. Article 1.1 of this Act confirms full and timely performance of Mr Danilyuk’s obligations before the Club. By payment of 50,000 US Dollars as first part of the agency remuneration, the Club confirmed proper performance by the agent. Considering the principle of venire contra factum proprium, the Club would contradict to its own behaviour by arguing the non-fulfilment of his obligations by Mr Danilyuk. Mr Danilyuk represented the Club, whereas Mr Muminov represented the Player in the transfer at stake.

b) Validity of the “bonus payment” provided by the Contract 4.5. Mr Danilyuk holds that the PSC was wrong in assuming repeated payment for one and the same core service. In the opinion of Mr Danilyuk, the PSC went against what the parties had stipulated in the Contract and against the practice of the jurisdictional bodies of FIFA and the RFU. From quoting the text of Articles 3.1 and 3.5 of the Contract, Mr Danilyuk concludes that the remuneration under the Contract has been split into two parts, a “fixed remuneration” of 50,000 US Dollars and a “bonus payment” of 50,000 US Dollars for each sports season (2012 – 2013 and 2013 – 2014) the Player takes part in official matches for the team of the Club in the football championship of Russia. The “bonus payment” is based on this event occurrence.

4.6. According to Mr Danilyuk, the deal that has been made is to be considered a “deal made under condition”, according to Article 157 para 1 of the Civil Code of the Russian Federation. This provision reads as follows:

“The deal shall be regarded as made under the suspensive condition, if the parties have made the arising of the rights and duties dependent on the circumstances, about which it is unknown, whether it (they) will, or will not, take place”.

4.7. Mr Danilyuk argues that the practice of bonus payments is quite commonly used by contracts of clubs and football agents because it splits the risks as to the quality and suitability of the player by dividing the agency remuneration into a first minimum payment to which will be added a further payment in case of realisation of the conditions set by the contract for such second payment. Mr Danilyuk supports his argument by referring to the decision of the DRC of the RFU in the case no. 129-13 of 29 August 2013 and to the decision of the PSC no. 03121004 of 26 March 2012. Mr Danilyuk concludes that the option of additional remuneration as a deal made under condition is recognized by the Russian legislation and by the practice of FIFA and RFU jurisdictional bodies. Mr Danilyuk holds that guided “by the pacta sunt servanda principle, the provision of additional remuneration, stipulated in art. 3.5 of the Contract, is valid and must be duly performed by the Club”.

c) Right of the agent to receive of additional remuneration under Article 3.5 of the Contract 4.8. Mr Danilyuk refers to Article 3.5 of the Contract and provides evidence from the official website of the Russian Football National League showing that the Player took part in official matches of the Club in the football championship of Russia in the sporting season 2012-2013. A second additional payment would be due under condition of participation in official matches of the Club in the football championship of Russia in the sporting season 2013-2014. According to Article 3.5 of the Contract the Club is obliged to pay the additional remuneration due for each season in the form of a prepayment until the 15th day of the month following the month of the expiration of the registration period.

4.9. Thus, according to Mr Danilyuk, the Contract does not provide any further instructions to the agent. The PSC erred when it referred to Articles 1008, Clause 1, 309 and 422 of the Civil Code of the Russian Federation and asked for an agent report and an additional Act of Completed Work as mandatory requirements for the payment of the additional remuneration. The PSC improperly interpreted Article 3.2 of the Contract. This provision asks for an Act of Completed Work (Act of execution) only for the fixed remuneration and not also for the bonus payment. The bonus payment depends just on the performance of the Player and not on any new kind of services by the agent to the Club.

4.10. In the reading of Mr Danilyuk of Article 1008 of the Civil Code of the Russian Federation, the obligation to provide the client with agent’s reports is not a mandatory rule. This provision reads as follows:

“Article 1008 Reports by the Agent

1. During the performance of the brokerage contract [must read: the Agency Agreement] the agent shall be obliged to submit his reports to the principal in the order and in the time-limits which are provided for by the contract. In the absence of appropriate terms and conditions in the contract, reports shall be submitted by

the agent to the extent of the execution of the contract by him or upon the expiry of the validity term of the contract”1.

4.11. Mr Danilyuk understands from Article 1006 of the Civil Code of the Russian Federation that the payment of agency fees does not directly depend on the availability of the agent’s reports. This provision reads as follows:

“Article 1006 The Bonus of the Agent

The principal shall be obliged to pay to the agent the bonus in the amount and in the order established by the brokerage contract [must read: Agency Agreement]”.

4.12. Mr Danilyuk adduces support for his view from two decisions of the Federal Arbitration Court of North Caucasus District, the first of which (of 9 November 2010, case no. A56-30147/2008) states that “the possibility to pay the Agent’s fee does not directly depend on the availability of the Agent’s reports within the meaning of Article 1006 of the Civil Code of the Russian Federation”. The second decision (of 22 July 2003, case no. F08-2135/2003) holds that “The arguments on illegality of agency fees collection have been reasonably rejected since the possibility of its payment within the meaning of Article 1006 of the Civil Code does not directly depend on the provision of the Agent’s reports when the service provision has been proved[n]”.

4.13. Mr Danilyuk concludes that “it is clear that the absence of the reports (which have never been requested by the Club) and Acts (the existence of which is not required under the laws of the Russian Federation) cannot be a reason of non-payment of the additional remuneration by the Club as referred in the Appealed Decision”.

4.14. Mr Danilyuk further refers to CAS 2013/A/3160 where at para 87, the Single Arbitrator found that “as a general rule Article 2 of the FIFA PAR 2008 only establishes that “The players’ agent is entitled to be remunerated for the service he provides” without mentioning any formal requirement as a precondition for the relevant right”. Notwithstanding this, the principle ubi lex voluit dixit, ubi noluit tacuit has to be applied according to Mr Danilyuk with reference to CAS 2006/A/1151, at para 15.

4.15. In Mr Danilyuk’s opinion, therefore, it was sufficient title for payment of the bonus sum that it had been established that the Player took part in the football championship of Russia in the season 2012-2013 for the Club and that the last month of the transfer window was September. Thus, the sum was due to the agent no later than 15 October 2013.

d) The amount of the additional remuneration due to the agent 4.16. Mr Danilyuk refers to Article 3.5 of the Contract according to which the Club is obliged to pay to the agent the additional remuneration in the amount of 50,000 US Dollars to be paid in rubles at the exchange rate of the Central Bank of Russia at the payment date for each of the two seasons mentioned. The dispute at stake refers to the season 2012-2013, thus one time 50,000 US Dollars are due to the agent. 1 The translation of the Russian terms into English is not consistent throughout the exhibits submitted by the Appellant. The Sole Arbitrator, reading Russian language, holds that the Russian term “agentskiy dogovor” shall be translated in the same manner in all documents as “Agency Agreement”.

4.17. Mr Danilyuk submits the following Prayers for Relief:

“1) The appeal filed by Mr. Danilyuk Mikhail is upheld; 2) The decision issued by RFU Players’ Status Committee on 03 October 2014 is set aside; 3) The Football Club “Shinnik” shall pay to Mr. Danilyuk Mikhail the amount of 50 000 USD as agency remuneration and 5% of the interest per year starting from 15 October 2013; 4) The Football Club “Shinnik” shall bear all the costs incurred with the present procedure; 5) The Football Club “Shinnik” shall pay to Mr. Danilyuk Mikhail a contribution towards its legal and other costs, in an amount to be determined at the discretion of the Panel”.

B. THE RESPONDENT:

4.18. The Respondent, who did not submit its Answer in time, objects to the payment and stated in its letter dated 7 April 2015 that all the facts written in its Answer excluded from the CAS file “are fully acknowledged by written submissions presented in case file”.

4.19 The Sole Arbitrator has of course taken into account the Respondent’s arguments as presented in the decision of the NDRC and in the Appealed Decision as well as in its letter of 4 February 2015. The Player’s statement, submitted by the Club on 4 February 2015, was also considered by the Sole Arbitrator. The Player stated that the Employment Agreement was signed between him and the Club after the expiration of his contract with his former club FC Zhemchuzhina. When signing he was a “Free Agent” and he made his representative Muminov Kakhor, who assisted him in this procedure, examine the Contract. The Player stated that he knew nothing about the participation of any other agent in his transfer. The Respondent draw the conclusion from this statement that there was no agreement or link between Mr Danilyuk and Mr Muminov.