Al-Jazira Football Sports Company v. Ricardo de Oliveira

II. FACTUAL BACKGROUND — A. Background Facts

3. Below is a summary of the relevant facts and allegations based on the parties’ written submissions. References to additional facts and allegations found in the parties’ written submissions and evidence will be made, where relevant, to the extent warranted for the

purposes of the legal analysis that follows. While hence, the Sole Arbitrator has considered all the facts, allegations, legal arguments, and evidence submitted by the parties in the present proceedings, he refers in his award only to the legal arguments and factual evidence submitted that he deems necessary to explain his reasoning.

4. On an unknown date, the Player and the Club concluded an employment contract (the “Employment Contract”), valid as of 1 August 2012 until 30 July 2015, pursuant to which the Player was entitled to a total remuneration of EUR 9,300,000.

5. On 21 January 2014, the parties concluded a settlement agreement (the “Settlement Agreement”). The Settlement Agreement determines, inter alia, the following:

“The PARTIES hereby agree that [the Club] shall, as full, complete and final settlement under the EMPLOYMENT CONTRACT, pay to the PLAYER, the total amount of Euro 2,560,000 (two million and five hundred and sixty thousand Euros) net of UAE INCOME TAX (“SETTLEMENT AMOUNT”), as follows:

(i) Euro 2,000,000 shall be paid on or before 30 January 2014;

(ii) Euro 560,000 shall be paid on or before 30 December 2014;

“UAE INCOME TAX” means tax levied by the Government of the United Arab Emirates on the income of individuals in the United Arab Emirates. The PARTIES acknowledge that presently, there is no UAE INCOME TAX enforced in the United Arab Emirates”.

6. On 18 August, 25 August, 16 September and 1 October 2014, counsel for the Player notified the Club of an alleged non-compliance with the terms of the Settlement Agreement.

B. Proceedings before the Dispute Resolution Chamber of FIFA

7. On 13 October 2014, the Player lodged a claim against the Club with the Dispute Resolution Chamber of FIFA (the “FIFA DRC”), claiming EUR 2,560,000, plus interest at a rate of 5% p.a. as of the date of breach of the Settlement Agreement until the date of effective payment.

8. On 2 July 2015, the FIFA DRC rendered its decision (the “Appealed Decision”), with the following operative part:

“1. The claim of the [Player] is 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 2,560,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 31 January 2014 on the amount of EUR 2,000,000; b. 5% p.a. as of 31 December 2014 on the amount of EUR 560,000.

3. In the event that the abovementioned amounts plus interest is not paid within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. The [Player] is directed to inform the [Club] 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”.

9. On 23 November 2015, the grounds of the Appealed Decision were communicated to the parties, determining, inter alia, the following:

“[…] [T]he DRC observed that the [Player] is claiming the amount of EUR 2,560,000 from the [Club], thereby asserting that the [Club] had not complied with the [Settlement Agreement].

On the other hand, the Dispute Resolution Chamber took note that, for its part, the [Club] asserts that the [Player] is not entitled to claim the second instalment of EUR 560,000 since the latter had not fallen due yet when he lodged his claim.

In this context, the members of the Chamber were eager to emphasise that the [Club] replied to the [Player’s] claim on 8 February 2015, i.e. after the second instalment had fallen due on 30 December 2014, and did not challenge that [sic] fact that it did not pay any of the instalments due. Furthermore, the Chamber noted that the [Club], in its reply to the claim, did not put forward any valid reasons to justify the lack of payment of the relevant amounts, as claimed by the [Player].

In continuation, the Chamber held that since the [Player] had already requested the total amount of EUR 2,560,000 in his claim, he correctly deemed that there was no need to amend his claim after the second instalment fell due.

On account of all the above, and bearing in mind that it was undisputed that the [Club] did not pay any amount due as per the [Settlement Agreement], as well as the legal principle of pacta sunt servanda and non ultra petita, the Dispute Resolution Chamber decided that the [Club] is liable to pay the amount of EUR [sic] EUR 2,560,000 to the [Player].

In addition, taking into consideration the [Player’s] claim, the Chamber decided that the [Club] had to pay default interest at a rate of 5% as follows:

- 5% p.a. as of 31 January 2015 on the amount of EUR 2,000,000;

- 5% p.a. as of 1 March 2013 [sic] on the amount of EUR 560,000”.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

10. On 13 December 2015, the Club lodged a Statement of Appeal with the Court of Arbitration for Sport (the “CAS”) in accordance with Article R48 of the Code of Sports-related Arbitration (2013 edition) (the “CAS Code”). In this submission, the Club requested the matter to be referred to a sole arbitrator.

11. On 22 December 2015, the Player requested the matter to be referred to a panel composed of three arbitrators.

12. On the same day, the CAS Court Office invited the Player to advise the CAS Court Office whether he intended to pay his share of the advance of costs.

13. On 23 December 2015, the Player informed the CAS Court Office that his intention to pay the advance of costs depended on the amount of his share.

14. On the same day, the CAS Court Office informed the Player that the number of arbitrators is one of the crucial criteria to determine the amount of the advance of costs and that, in view of the parties’ disagreement regarding the composition of the panel, his question would be referred to the President of the CAS Appeals Arbitration Division, or her Deputy.

15. On 4 January 2016, the CAS Court Office informed the parties that the President of the CAS Appeals Arbitration Division decided to submit the present matter to a panel composed of three members, but that this decision was subject to the payment by the Player of his share of the advance of costs and that if the Player would fail to do so, the matter would be referred to a sole arbitrator.

16. On the same day, the Club filed its Appeal Brief in accordance with Article R51 of the CAS Code. This document contained a statement of the facts and legal arguments. The Club challenged the Appealed Decision, submitting the following requests for relief:

“FIRST – To set aside the Appealed Decision in full;

SECOND – To confirm that the Respondent failed to comply with its obligations in accordance to the Settlement Agreement, that is to say, to provide the Appellant with the proper bank account in his name, in Brazil, for the payment of the first instalment set out in the Settlement Agreement (cf. Art. 74 of the Swiss CO);

THIRD – To confirm that the Respondent never provided the Appellant with any bank account (whatsoever) for the payment of the second instalment set out in the Settlement Agreement and as such, failed again to comply with its obligations in accordance with the Settlement Agreement;

FOURTH – To order the Respondent to pay the full amount of the CAS arbitration costs; and

FIFTH – To order the Respondent to pay a significant contribution towards the legal costs and other related expenses of the Appellant, at least in the amount of EUR 20,000 (twenty thousand Euros).

Alternatively and only in the event the above is rejected:

SIXTH – In the event that the CAS determines that the Respondent was entitled to receive the claimed amounts in a bank account in his name, in the UAE, to uphold that default interest on the first instalment shall start as from the 25 August 2014 in lieu of 31 January 2014, as mistakenly indicated in the Appealed Decision;

SEVENTH – To confirm, nevertheless, that the Respondent never provided the Appellant with any bank account (whatsoever) for the payment of the second instalment set out in the Settlement Agreement, and as such, failed again to comply with its obligations in accordance with the Settlement Agreement;

EIGHT – To order the Respondent to pay the full amount of the CAS arbitration costs; and

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

17. On 12 January 2016, FIFA informed the CAS Court Office that it renounced its right to request its possible intervention in the present arbitration proceedings.

18. On 13 January 2016, the Player informed the CAS Court Office that, having duly taken note of the Appeal Brief lodged by the Club, and considering the evident lack of complexity of the present matter, the Player requested that the present matter be submitted to a sole arbitrator and that this was the reason why he would not bear his share of the advance of costs.

19. On 18 January 2016, the Club informed the CAS Court Office that it agreed to refer the present matter to a sole arbitrator.

20. On 22 February 2016, in accordance with Article R54 of the CAS Code, and on behalf of the President of the CAS Appeal Arbitration Division, the CAS Court Office informed the parties that the arbitral tribunal appointed to decide the present matter was constituted as follows:

– Petros C. Mavroidis, Professor of Law, Switzerland, as Sole Arbitrator;

21. On 15 March 2016, the Player filed his Answer in accordance with Article R55 of the CAS Code. The Player submitted the following requests for relief:

“a) Dismiss the appeal filed by Al-Jazira Football Sports-Company;

b) Confirm the decision of the FIFA Dispute Resolution Chamber dated 02 July 2015;

c) Order Appellant to pay to Respondent the amount of EUR 2,560,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 31 January 2014 on the amount of EUR 2,000,000;

b. 5% p.a. as of 31 December 2014 on the amount of EUR 560,000;

d) Order that Al-Jazira Football Sports-Company reimburse Ricardo de Oliveira for legal expenses in the amount of CHF 30.000,00 (thirty thousand Swiss Francs), added to any and all FIFA and CAS administrative and procedural costs, already incurred or eventually incurred, by Ricardo de Oliveira”.

22. On 29 March 2016, the Club informed the CAS Court Office that it preferred a hearing to be held. The Player, on the other hand, informed the CAS Court Office that he did not deem a hearing necessary.

23. On 1 April 2016, the CAS Court Office informed the parties that the Sole Arbitrator deemed himself sufficiently informed to render an arbitral award solely based on the parties’ written submissions, without holding a hearing. The parties were further advised that Mr Dennis Koolaard, attorney-at-law in Arnhem, the Netherlands, has been nominated as ad hoc clerk.

24. On 27 April and, respectively, 2 May 2016, the Player and the Club returned duly signed copies of the Order of Procedure to the CAS Court Office.

25. The Sole Arbitrator confirms that he carefully 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

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

– The Club maintains that the FIFA DRC failed to take into account crucial points of the Settlement Agreement, in particular, regarding the place where the payment had to be made. With reference to Swiss law, the Club argues that there is no doubt that the transfer of the amounts set out in the Settlement Agreement had to occur in a bank account located in Brazil in lieu of the United Arab Emirates.

– Also with reference to Swiss law, the Club argues that, since the Player failed to indicate the (Brazilian) bank account, the Club was obviously not able to transfer the claimed amounts set out in the Settlement Agreement.

– Furthermore, the Club submits that the Player addressed a new correspondence to the Club on 25 August 2014 whereby he requested the payment of the first installment to be complied in a bank account located in the United Arab Emirates in lieu of Brazil. This violates the principle of venire contra factum proprium, was legally groundless, and was in clear disrespect of the legal principle of pacta sunt servanda.

– With reference to Swiss law and CAS jurisprudence, the Club argues, that “when it is a sum of money, the payment occurs at the place where the creditor is domiciled at the time of payment”.

– The Club argues that the FIFA DRC disregarded that the Player failed to comply with his obligations, which in fact were conditional in order to permit the Club to fulfill its obligations under the Settlement Agreement. With reference to CAS jurisprudence, the Club submits that the FIFA DRC thereby violated the legal principle of cuius commode, eius et incommode.

– The Club further submits that it never reached an agreement with the Player as to amend the Settlement Agreement, while the Settlement Agreement determines that no modification can be made, unless made in writing and signed by the parties.

– The Club maintains that the Settlement Agreement does not mention the Player’s bank account and that it was therefore prevented from transferring any amounts to the Player and no default interest is payable.

– The Club also argues that, in case the Player were entitled to receive the stated amount for the first installment, payment was only possible after the Club had received the necessary bank details from the Player for the payment to take place. Default interest should therefore apply only as of 25 August 2014.

– Finally, the Club maintains that the Player did not provide it with the bank details for the payment of the second installment pursuant to the Settlement Agreement, therefore, interest in respect of the second installment, in case the panel holds that it is due, should not start to accrue before 31 December 2014.

27. The Player provided, inter alia, the following submissions:

– The appeal clearly has a mere dilatory intent, given that the matter is extremely simple and straightforward. […]

– The Appellant never paid to the Player the amounts agreed. The Player was thus forced, first, to notify for four times Al-Jazira for payment and then to lodge a claim against the Appellant before the competent bodies of FIFA. It is to be noted, in this regard, that all 4 (four) notifications remained simply unanswered by the Appellant side. Additionally, before FIFA, after having twice requested for an extension of the deadline to submit its answer and having therefore enjoyed an extraordinary long time limit of two months to submit its position, Appellant’s unique defense was that the second instalment was allegedly not due because the claim was lodged before its maturity due.

– Such a defence, conveniently rejected by the Appealed Decision, was no longer presented by Appellant before the CAS, having been “replaced” by the equally weak argument according to which the parties would have agreed for the payment to be done in a bank account located in Brazil, rather than the UAE bank account which was used by the Parties during the course of the employment relationship.

– The said argument being entirely irrelevant and flawed, the Court of Arbitration for Sports shall fully confirm the Appealed Decision and therefore condemn the Appellant to the payment of what is due to the Player since years, in line with what had been agreed between the Parties.