Al-Jazira Football Sports Company v. José Mesas Puerta

II. FACTUAL BACKGROUND — A. Background facts

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

4. On 1 October 2011, the Agent concluded a representation contract (the “Representation Contract”) with the player A., a Moroccan professional footballer (the “Player”), which was valid for two years and provided inter alia the following:

“FOURTH: The representative shall receive from the player remuneration equal to 10% of the total amount of its annual wages, including all types of income but excluding the bonuses and special awards that the Club agrees with the player and squad. The referred consideration shall only be valid with reference to agreements entered into after the execution of the contract hereunder. The player shall decide on how to undertake the payment of the referred consideration, whether individually (not subject to VAT) or through a commercial company (in which case the respective VAT shall accrue). The club may make the payment directly to the agent and if the amount equal to 10% is not met the player shall complete it.

(…)

The assessment and payment to the representative of the aforementioned amounts shall be made by the end of each season and after the club has paid the player”.

5. On 6 June 2013, the Agent and the Player concluded an additional agreement (the “Commission Agreement”), which stated that:

“WHEREAS

(…)

2 – As a result of the work carried out the AGENT, THE PLAYER finalized his transfer to club AL JAZIRA FOOTBALL SPORT COMPANY of Abu Dhabi (hereinafter THE CLUB), with whom he signed a professional football contract for the next 4 seasons.

3 – As per clause FOURTH of the representation contract referred in 1. above, THE PLAYER shall pay the AGENT, on account of commission, 10% of his annual wages amounting to ONE MILLION ONE HUNDRED THOUSAND EUROS (1.100.000,00€).

4 – The player wishes, once agreed by the interested parties, THE CLUB AL JAZIRA to directly pay the commission referred to in the paragraph below to the AGENT, and to that end the parties sign the agreement hereunder which shall be governed by the following

PROVISIONS

1. – The player accepts that THE CLUB shall directly pay TO THE AGENT the commission referred in the Whereas section.

2. – The agreement hereunder is brought to the attention of the CLUB, with the purpose that a document expressing the commitment of payment of the commission by THE CLUB to THE AGENT is issued.

3. – After payment of the referred commission by the CLUB, THE PLAYER shall not pay the AGENT any amount in relation to the professional footballer contract signed with THE CLUB”.

6. On 7 June 2013, the Club issued a document captioned “Commission” (the “Commission Document”), which stated the following:

“This is to certify that Al Jazira Sports Company will pay 10% to Mr Jose Jesus Mesas of Elite Sport Asesores S.L. as a commission of the Player [A.]’s contract, which worth Euro 1,100,000 (One Million One Hundred Thousand Euro)”.

7. On 30 June 2013, the Club, the Player and the Spanish football club G. concluded a transfer agreement for the transfer of the Player from G. to the Club against a fixed transfer fee of EUR 8,500,000 (the “Transfer Agreement”).

8. On the same day, the Club and the Player signed an employment contract valid until 30 June 2017 (the “Employment Contract”). The Employment Contract provided for a total remuneration of the Player in the amount of EUR 11,000,000 during its four-year term, as well as additional performance bonus payments. In particular, according to the salary payment schedule stipulated in the Employment Contract, the Club should pay to the Player four advance payments of EUR 1,000,000 each, payable at the beginning of each season (before 15 July of each respective year), as well as a salary of EUR 1,600,000 for the first year, EUR

1,700,000 for the second year, EUR 1,800,000 for the third year and EUR 1,900,000 for the fourth year.

9. The Agent was not a party to either the Transfer Agreement or the Employment Contract.

10. On 8 August 2014, the Club and the French Football Club O. concluded a transfer agreement for the transfer of the Player from the Club to O. (the “Second Transfer Agreement”) and on 12 August 2014, the Club and the Player mutually terminated their employment relationship.

B. Proceedings before the FIFA Players’ Status Committee

11. On 20 March 2014, the Agent lodged a claim with the Players’ Status Committee of FIFA (the “FIFA PSC”) against the Club, requesting payment of the outstanding commission in the amount of EUR 1,100,000. The Agent amended his prayers for relief on 16 February 2016 requesting interest 5% p.a. on the aforementioned amount as from 7 June 2013 until the date of effective payment and EUR 10,000 for legal fees and costs.

12. The Club, by way of its response, rejected the Agent’s claim and submitted that the Agent had no legal grounds to file a claim against it as he did not provide any services to the Club and no representation agreement was concluded between them. The Club further challenged the FIFA PSC jurisdiction to rule on the claim because the Agent was never a party to any of the contracts concluded between the Club and the Player.

13. On 27 July 2016, the Single Judge of the FIFA PSC rendered his decision (the “Appealed Decision”), by means of which it partially accepted the Agent’s claim. The operative part of the decision stated the following:

“1. The claim of the Claimant, José Mesas Puerta, is admissible.

2. The claim of the Claimant, José Mesas Puerta, is partially accepted.

3. The Respondent, Al Jazira Football Sport, has to pay to the Claimant, José Mesas Puerta, within 30 days as from the date of notification of this decision, the outstanding amount of EUR 1,100,000, plus interest at a rate of 5% per year from 20 March 2014 until the date of effective payment.

4. Any further claims lodged by the Claimant, José Mesas Puerta, are rejected.

5. If the aforementioned sum, plus interest as provided above, is not paid within the aforementioned deadline the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision”.

14. On 16 March 2017, FIFA communicated to the parties the grounds of the Appealed Decision, following a request of the Club, which, inter alia, determined the following:

“3. With regard to his competence, the Single Judge of the Players’ Status Committee pointed out that in accordance with the provisions set out by the Regulations, FIFA has jurisdiction on matters relating to licensed players’ agents, i.e. on individuals who hold a valid players’ agent license issued by the relevant member Association.

4. In this respect, the Single Judge underlined that the present matter concerns a dispute between a players’ agent licensed by the Spanish Football Federation and an Emirati club regarding an alleged outstanding commission.

5. As a consequence, the Single Judge of the Players’ Status Committee is competent to decide on the present matter which has an international dimension (cf. art. 30 par. 2 of the Regulations).

(…)

7. In doing so and to start with, the Single Judge took note that on 1 October 2011 the player and the Claimant concluded a contract valid for two years entitling the latter to receive a commission amounting to 10% of the total player’s remuneration except bonuses. Moreover, the Single Judge noted that clause four of the contract provided the possibility that the commission would be paid directly by the Respondent to the Claimant.

8. Equally, the Single Judge acknowledged that on 6 June 2013, the player and Claimant concluded the agreement by means of which the latter was entitled to receive from the player a commission amounting to EUR 1,100,000 (cf. clause four of the contract) in connection to the transfer of the player to the Respondent. Moreover, point 1 in combination with point 4 of the agreement established expressly the player’s consent that the relevant commission shall be paid by the club on behalf of the player.

9. In addition, the Single Judge acknowledged that it remained uncontested that, on 7 June 2013, the Respondent issued the document, in accordance with which it agreed to pay the amount of EUR 1,100,000 on behalf of the player, corresponding to the commission due for conclusion of the employment contract between the player and the Respondent.

10. At this stage, the Single Judge took note that the Claimant had requested the amount of EUR 1,100,000 from the Respondent on the basis of the document, whereas, the Respondent had alleged that the Claimant was not entitled to receive a commission from them since it did not conclude a representation contract with the Claimant and since it was not a party in the legal instruments concluded between the player and the Claimant.

11. Having duly examined the argumentation and documentation put forward by both parties, the Single Judge referred to art. 19 par. 4 of the Regulations which provides, inter alia, that “the player may give his written consent for the club to pay the player’s agent on his behalf” and, on this account, recalled that, by means of the contract as well as the agreement, the player expressed such required consent in writing.

12. In continuation, the Single Judge turned his attention to the Respondent’s argument regarding the due date of the commission payments and pointed out that, although the contract stipulated that the

commission payments shall be done in accordance with the player’s annual salary, the more recent agreement as well as, in particular, the document established the Claimant’s entitlement to a lump sum payment amounting to EUR 1,100,000, which was due at the date of the issuance of the document.

13. In view of all the above, the Single Judge decided that, in accordance with the general principle of pacta sunt servanda which in essence means that agreements must be respected by the parties in good faith, the Respondent must pay to the Claimant the commission agreed upon in the amount of EUR 1,100,000.

(…)

16. In addition, considering the Claimant’s request, the Single Judge decided that the Respondent has to pay an annual interest at a rate of 5% over the amount of EUR 1,100,000 from the date of lodging the present claim, i.e. on 20 March 2014 until the date of effective payment”.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

15. On 6 April 2017, the Club submitted a statement of appeal in accordance with art. R47 and R48 of the Code of Sports-related Arbitration (the “Code”) to the Court of Arbitration for Sport (the “CAS”), challenging the Appealed Decision. With its statement of appeal, the Appellant also appointed Prof. Massimo Coccia as arbitrator. The appeal was directed against FIFA as well.

16. On 21 April 2017, the Respondent nominated Mr Hendrik Willem Kesler as arbitrator.

17. On 25 April 2017, FIFA sent a letter to the CAS Court Office indicating that they deem that FIFA cannot be considered as a Respondent in the present arbitration.

18. On 26 April 2017, the Appellant filed its appeal brief requesting the CAS to:

“(i) Set aside the decision of the Single Judge of the FIFA Players’ Status Committee dated 27 July 2016;

(ii) Find that FIFA had no jurisdiction to analyse the claim submitted by the Players’ Agent José Mesas Puerta;

Subsidiarily, in the event that the CAS considers that FIFA has jurisdiction,

(iii) Confirm that Al Jazira Football Sport Company is not bound to pay any commission to the Players’ Agent José Mesas Puerta;

Subsidiarily, in the event that the Panel considers that Al Jazira is liable to pay a commission to the Players’ Agent José Mesas Puerta,

(iv) Determine that said commission cannot exceed the final amount of EUR 260,000 (two hundred and sixty thousand Euros);

(v) Order the Respondents to pay the full amount of the CAS arbitration costs;

(vi) Order the Respondent to pay a significant contribution towards the legal costs and other related expenses of Al Jazira Football Sport Company, at least in the amount of EUR 40,000”.

19. On 5 May 2017, FIFA sent a letter to the CAS Court Office addressing the procedural aspect raised by the Appellant in connection with FIFA’s competence. In this regard, it referred to the relevant section of the Appealed Decision and further stressed that all the arguments raised as to the existence of a contractual relationship between the Appellant and the Respondent concern the substance of the dispute, particularly if the claim is sustained and should be accepted or rejected, but not FIFA’s jurisdiction itself. FIFA requested that they be excluded from the procedure at stake.

20. On 12 May 2017, the Appellant withdrew the appeal against FIFA and, on 15 May 2017, the CAS Court Office informed the parties that FIFA is no longer a party to the present arbitration.

21. On 22 May 2017, the Respondent filed his answer in accordance with art. R55 para. 1 of the Code requesting the CAS:

“1. To dismiss the present appeal of Al Jazira Football Sport Company, in view of the several reasons pointed out in the present Statement of Defence. In other words, to deny all the requests of the Appellant, considering that all of them are groundless.

2. To fully uphold the decision of FIFA DRC and state that Al Jazira Football Sport Company has to pay to Mr. José Mesas Puerta the amount of EUR 1,100,000 (One Million One Hundred Thousand Euro) plus 5% interest p.a. as from 20 March 2014 until the effective date of payment.

3. To confirm the fact that the Club should reimburse to the Agent the amount of CHF 5,000 of his costs of the FIFA proceedings, as stipulated by the par. 6 of the Appealed Decision.

4. To fix a sum of CHF 25,000 to be paid by the Appellant to the Agent, to help the payment of its legal fees costs.

5. To condemn the Appellant to the payment of the whole CAS administration costs and the Arbitrators fees”.

22. On 23 May 2017, the CAS Court Office invited the parties to state whether they prefer a hearing to be held in this matter.

23. On 24 May 2017, the Respondent informed the CAS Court Office that he preferred for a hearing to be held.

24. On 30 May 2017, the Appellant wrote to the CAS Court Office stating that “holding a hearing in the current proceedings is not necessary to decide the disputed matter and therefore prefers for the Panel to issue an award based on the parties’ written submissions”.

25. On 21 June 2017, the CAS Court Office informed the parties that the Panel appointed to decide this matter had been constituted as follows:

President: Mr Sofoklis Pilavios, Attorney-at-Law in Athens, Greece.

Arbitrators: Prof. Massimo Coccia, Attorney-at-law in Rome, Italy.

Mr Hendrik Willem Kesler, Attorney-at-law in Enschede, the Netherlands.

26. On 27 June 2017, the CAS Court Office informed the parties that the Panel had decided to hold a hearing in this matter.

27. On 10 August 2017, the CAS Court Office issued an order of procedure, which was signed and returned to the CAS by the parties on 14 and 17 August 2017, by the Respondent and the Appellant respectively.

28. On 28 September 2017, a hearing took place at the CAS Court Office in Lausanne, Switzerland.

29. The Panel sat in the following composition:

President: Mr Sofoklis Pilavios, Attorney-at-law in Athens, Greece.

Arbitrators: Prof. Massimo Coccia, attorney-at-law in Rome, Italy.

Mr Hendrik Willem Kesler, attorney-at-law in Enschede, the Netherlands.

30. The Panel was assisted by Mr Daniele Boccucci, CAS Counsel.

31. The following persons attended the hearing:

- The Appellant was represented by its legal counsel, Mr Bernardo Palmeiro.

- The Respondent attended the hearing personally and was also represented by Mr Juan de Dios Crespo Pérez and Mr Ivan Bykovskiy.

32. At the outset of the hearing, the parties confirmed that they did not have any objection as to the constitution and composition of the Panel.

33. At the conclusion of the hearing, the parties confirmed that their right to be heard and to be treated equally in the present proceedings before the Panel had been fully respected, following which the Panel closed the hearing and announced that its award would be rendered in due course.

IV. SUBMISSIONS OF THE PARTIES

34. The following outline of the parties’ positions is illustrative only and does not necessarily comprise every submission advanced by the parties. The Panel has nonetheless carefully considered all the submissions made by the parties, whether or not there is specific reference to them in the following summary.

A. The Appellant

35. The Appellant’s submissions, in essence, may be summarized as follows:

- The Appellant’s position is that (i) the FIFA PSC had no jurisdiction to hear the present dispute, (ii) the Appellant never assumed any obligation towards the Respondent, and, (iii) should the CAS decide that the Appellant assumed indeed an obligation towards the Respondent, the amount due is to be calculated considering only the remuneration effectively paid to the Player under the Employment Contract until its termination and not the total value of the Contract.

- Firstly, the international nature of the dispute at stake is not sufficient to establish the jurisdiction of the FIFA PSC. In order for such jurisdiction to be established, it is necessary that there be a contractual relationship between the parties, which is not the case here. As the Appellant never assumed the obligation to pay the Respondent’s commission, said obligation remained with the Player. The only legal relationship entered into by the Respondent is the one with the Player.

- Consequently, there is no formal or material contractual relationship connecting the Appellant with the Respondent and the FIFA PSC should have rejected the Respondent’s claim on the grounds of lack of jurisdiction.

- Secondly, as to the merits of the dispute, there was no agreement and no contract was entered into between the Appellant and the Player or the Appellant, the Player and the Respondent, providing that the Appellant indeed assumed the debt of the Player towards the Respondent.

- The Commission Document issued by the Appellant is a “mere letter of acknowledgement”, by means of which the Appellant expressly acknowledged the Player’s request that a certain payment be made on his behalf. It is certainly not a binding representation contract. The fact that the Player gave his written consent to the Appellant to make the payments to the Respondent on the Player’s behalf does not mean that the Appellant assumed the Player’s debt towards the Respondent. Assumption of debt under Swiss law requires a contract between the debtor and the third party (i.e. the Appellant). The said contract must comply with the requirements of the Swiss Code of Obligations and should include a clear promise of the third party to liberate the original debtor from the debt. Assumption of debt cannot occur by means of a document issued individually by the assuming party

and one cannot possibly conclude that the Appellant’s written statement of 7 June 2013 represents an agreement.

- The fact that the Appellant issued the Commission Document is no evidence of an intention to assume the Player’s debt towards the Respondent. This is further demonstrated by the fact that in both the Representation Contract and the Commission Agreement, it is stated that the Player must pay any amounts not paid by the Appellant and that he is only released from such obligation once payment of the entire commission is executed. The Appellant never effectively assumed the Player’s obligation to pay the commission to the Respondent.

- Thirdly, in the unlikely event that the Panel considers that the Appellant assumed the Player’s debt towards the Respondent, the Appellant submits that only a fraction of the amount of EUR 1,100,000 which was awarded by the Appealed Decision is due to the Respondent. The amount awarded by FIFA corresponds namely to the total amount of the Respondent’s commission for the full term of the Employment Contract, i.e. 4 years. Moreover, according to the Representation Contract, the Respondent is entitled to receive his commission at the end of each season and after the Player has received all the payments from the Appellant.

- It is therefore impossible that the full amount of EUR 1,100,000 became immediately and in full due on 7 June 2013 when the Appellant issued the Commission Document, whereas at the same time the Employment Contract was signed by the Appellant and the Player on 30 June 2013. The Commission Document is nothing more than a formalisation of the general engagement of the Appellant in accepting the Player’s desire to have the Appellant make the payment of the Respondent’s commission. However, such unilateral statement cannot be deemed as a contractual undertaking by the Appellant.

- Furthermore, the Commission Document does not comply with the requirements set out in the FIFA Players’ Agents Regulations and it does not contain the specific terms of payment, which are necessary in order for it to become enforceable.

- The parties’ intention is reflected in the Representation Contract only. The Respondent is entitled to 10% of the fixed remuneration received by the Player, to be paid at the end of each year and after the Player has received his remuneration from the Appellant. Considering that the Player was transferred to O. after his first season with the Appellant, and that he only received a salary of EUR 2,600,000, the Respondent is thus entitled to receive a commission of EUR 260,000. As a result, the amount awarded to the Respondent by the CAS, if any, cannot exceed that amount.

B. The Respondent

36. The Respondent’s submissions, in essence, may be summarized as follows:

- At the time of the Player’s transfer to the Appellant, the former had a valid representation contract with the Respondent, whereas on 6 June 2013, the Player and the Respondent also signed the Commission Agreement which provided that the Respondent’s commission shall be paid to him directly by the Appellant. The Appellant issued the Commission Document, the existence of which is not disputed by the Appellant, to approve the aforementioned condition of the Commission Agreement.

- The Appellant’s allegations on the lack of any contractual relationship with the Respondent are contradicted by the fact that the Appellant agreed to pay the amount described in the Commission Document to him and that in November 2013 the Appellant engaged in negotiations for the payment of the commission in dispute.

- The only possible explanation of the meaning of the Commission Document is that it was an unconditional recognition of the Appellant’s debt towards the Respondent. Art. 18 of the Swiss Code of Obligations cannot apply as the terms of the Commission Document cannot be deemed as unclear or doubtful.

- The Appellant’s argument that there is no contractual relationship between the Appellant and the Respondent should be dismissed. The Commission Document is the contractual basis which binds the parties to this dispute. Moreover, the payment of the agreed commission to the Respondent by the Appellant was a condition and a pre-requisite for the conclusion of the Player’s transfer from G. and the signing of the employment contract between the Appellant and the Player.

- There is no excuse for the Appellant’s refusal to pay the agreed commission amount. In any event, the wording of the Commission Document “the Club certifies that it will pay” leaves no room for a different interpretation.

- The Appellant’s conduct to issue the Commission Document confirming its intention to pay the amount of EUR 1,100,000 to the Respondent created a legitimate assumption to the Respondent. To refuse its own acknowledgment is for the Appellant a violation of the legal principle of estoppel and of the principle of good faith.