Nyiregyhaza Spartacus Football Club Kft. v. Vukasin Poleksic

VI. JURISDICTION

80. In accordance with Article 186 of the Swiss Private International Act (“PILA”), the CAS has the power to decide upon its own jurisdiction.

81. Article R47 para. 1 of the CAS Code provides as follows:

“An appeal against the decision of a federation, association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the Appellant has exhausted the legal remedies available to it prior to the appeal, in accordance with the statutes or regulations of that body”.

82. Article 58(1) of the FIFA Statutes (2020 edition) states as follows:

“Appeals against final decisions passed by FIFA’s legal bodies and against decisions passed by confederations, member associations or leagues shall be lodged with CAS within 21 days of receipt of the decision in question”.

83. Article 23(4) of the FIFA RSTP reads – in its pertinent part – as follows:

“Decisions reached by the single judge or the Players’ Status Committee may be appealed before the Court of Arbitration for Sport (CAS)”.

84. In addition, the Appealed Decision provides as follows:

“According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision”.

85. Furthermore, Clause XI.4 of the Employment Contract reads as follows:

“The Parties agree to resolve their disputes amicably, by way of negotiations. Should the Parties fail to resolve their dispute amicably, the Parties shall submit themselves – in the cases set out in the regulations of MLSZ and FIFA – to the competent department of MLSZ and FIFA, in the case of labour disputes to the competent Administrative and Labour Court and in every other case to the Permanent Court Arbitration pursuant to Section 47 of the Sports Act. The number of arbitrators shall be 3, the procedure shall be governed by the Procedural Rules of the Arbitration”.

86. The Appealed Decision of 18 February 2021 constitutes a decision passed by a legal body of FIFA, i.e. the Single Judge of the FIFA PSC. Thus, the above prerequisites are fulfilled. The Panel also takes note of the fact that neither of the Parties objected to the jurisdiction of the CAS and that the OoP was duly signed by both Parties without reservation.

87. It follows from all of the above that the CAS has jurisdiction to adjudicate and decide on the present dispute.

VII. ADMISSIBILITY

88. The Respondent objects to the admissibility of the appeal, because the Appellant did not observe the 21-day time limit after being notified of the First Decision in August 2020. The Appellant, in turn, submits that it filed its appeal in time after FIFA had notified the Appealed Decision to it on 18 February 2021.

89. Article R49 of the CAS Code provides as follows:

“In the absence of a time limit in the statutes or regulations of the federation, association or sports-related body concerned, or in a previous agreement, the time limit for the appeal shall be twenty-one days from the receipt of the decision appealed against. The Division President shall not initiate a procedure if the statement of appeal is, on its face, late and shall so notify the person who filed the document. When a procedure is initiated, a party may request the Division President or the President of the Panel, if a Panel has been already constituted, to terminate it if the statement of appeal is late. The Division President or the President of the Panel renders her/his decision after considering any submission made by the parties”.

90. Article 58(1) of the FIFA Statutes (2020 edition) provides as follows:

“Appeals against final decisions passed by FIFA’s legal bodies and against decisions passed by confederations, member associations or leagues shall be lodged with CAS within 21 days of receipt of the decision in question”.

91. In addition, the Appealed Decision provides – in its pertinent parts – as follows:

“According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision”.

92. In the present case the First Decision has been substituted by FIFA with the Appealed Decision. Furthermore, the Panel observes that the Appellant did request the grounds of the First Decision in time. However, the deadline to file an appeal within the meaning of Article R49 of

the CAS Code only starts running – according to established CAS jurisprudence – as of receipt of the reasoned decision.

93. The Panel observes that based on the documents on file, FIFA informed the Parties of the First Decision dated 11 August 2020 on 12 August 2020. On 17 August 2020, the Appellant requested the grounds of said decision and paid the respective costs for such request. The Appellant did not receive any information from FIFA until the latter notified the Parties of the rectification of the decision on 16 December 2020. The Appellant then filed a further request to receive the grounds of the Appealed Decision and did so within the 10-day deadline on 22 December 2021. The Appellant ultimately received the grounds of the Appealed Decision on 18 February 2021. The Panel finds that this is the relevant date for calculating the 21-day deadline. Based on Article R32 of the CAS Code, the time limit, thus, began on 19 February 2021 and ended on 11 March 2021. The Appellant filed its appeal on 10 March 2021 and therefore in accordance with the 21-day deadline provided for in Article 58(1) of the FIFA Statues.

94. Consequently, the Panel finds that the appeal was filed in time and is admissible.

VIII. OTHER PROCEDURAL ISSUES

1. Respondent’s Cross-Appeal / Counterclaim

95. In his Answer, the Respondent filed the following alternative prayer for relief:

“iii) to order the Appellant to pay the Respondent the amount of […] HUF with the interests of 5% starting from 21 November 2019” (emphasis added).

96. The above is an alternative counterclaim / cross-appeal, since the Appealed Decision provides in its operative part – inter alia – as follows:

“5% p.a. on the amount of HUF […] as from the date on which the claim was lodged, i.e. 30 April 2020, until the date of effect” (emphasis added).

97. The Respondent, thus, seeks an amendment of the Appealed Decision as to the starting date of the calculation of the amount of interest.

98. However, counterclaims / cross-appeals are no longer admissible in appeal arbitration proceedings before the CAS since the 2010 revision of the CAS Code (with the exception of disputes falling within the scope of application of the World Anti-Doping Code). This is common ground in the legal literature and in CAS jurisprudence: “[i]t must be noted that, since 2010, counterclaims are no longer possible in appeal procedures. This means that, if a potential respondent wants to challenge part or all of a decision, it must file an independent appeal with the CAS within the applicable time limit for appeal” (MAVROMATI/REEB, The Code of the Court of Arbitration for Sport, 2015, pp. 249 and 488, with references to CAS 2010/A/2252, no. 40, CAS 2010/A/2098, nos. 51-54, CAS 2010/A/2108, nos. 181-183; see also CAS 2013/A/3432 nos. 54-57 with reference to a decision of the Swiss Federal Tribunal).

99. The Panel shares such view and finds that the Coach’s request in relation to interest go beyond a mere statement of defence and that, in case such request were upheld, it would have the effect of prejudicing the position of the Appellant. Accordingly, such claim is declared inadmissible by the Panel. In other words, in order for the Coach to have validly raised this issue, he should have filed his own independent appeal against the Appealed Decision (cf. CAS 2017/A/5481 paras. 42-46, and CAS 2017/A/5336 para. 116). The Panel notes that the Respondent – after having been made aware by the Panel of the above-cited CAS jurisprudence – decided not to pursue his cross-appeal / counterclaim any longer.

2. The issue of the Observer

100. It is recalled that the Respondent objected to the participation during the 15 July 2021 hearing of Dr Réka Vass and Dr Géza Róka, which the Panel ultimately decided to allow for the following reasons.

101. Proceedings in appeals arbitration proceedings are – subject to the limitations in Article R57 (2) of the CAS Code – not public. Thus, in principle, observers are not allowed to attend CAS hearings without the consent of the other party (and the Panel). In the case at hand, the Appellant requested that Dr Réka Vass and Dr Géza Róka attend the hearing as observers. Dr Réka Vass is a lawyer with Hegymegi-Barakonyi and Partner Baker & McKenzie, the Appellant’s law firm. Dr Géza Róka is an employee of the Appellant. In view of the functions held by the above persons, the Panel finds that the principle of confidentiality is not violated by allowing these persons to attend the hearing, and accordingly permitted them to do so.

IX. APPLICABLE LAW

102. With regard to the applicable law, the Appellant submits that this dispute is governed by Hungarian law according to Clause XI.5 of the Employment Contract. In turn, the Respondent is of the view that the Parties agreed on the application of the FIFA regulations to the merits, and accordingly, the FIFA rules and regulations apply to this appeal.

103. Article R58 of the CAS Code provides as follows:

“The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law that the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

104. Article 57(2) of the FIFA Statutes (2020 edition) reads as follows:

“The provisions of the CAS Code of Sports-related Arbitration shall apply to the proceedings. The CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss law”.

105. In addition, Clause XI.5 of the Employment Contract provides as follows:

“The Parties agree that the provisions of Hungarian law shall apply to their legal relationships. Matters not regulated by this employment contract shall be governed by the Labour Code, the Sports Act and other applicable legislation, as well as the rules of the Employer, MLSZ, UEFA and FIFA”.

106. The starting point to determine the applicable law is Article 187(1) of the PILA, which reads as follows:

“The arbitral tribunal shall decide the dispute according to the rules of law chosen by the parties or, in the absence of such a choice, according to the rules of law with which the case has the closest connection”.

107. The Panel notes that the Parties have submitted their dispute to CAS and therefore decided that the CAS Code, including Article R58 of the CAS Code, shall govern the appeal arbitration proceedings. This finding is further corroborated by the OoP signed by both Parties, which states in relation to the applicable law as follows:

“In accordance with Article R58 of the Code, the Panel shall decide the dispute according to the applicable regulations and, subsidiarily, the rules of law chosen by the Parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law, the application of which the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

108. The Panel notes that – according to Article R58 of the CAS Code – it shall firstly “decide the dispute according to the applicable regulations” and secondly based on the “the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law the Panel deems appropriate”. By corollary, Article R58 of the CAS Code, in principle, gives precedence to the applicable regulations (of the relevant federation) over the Parties’ choice of law.

109. The above finding is not contradicted by Clause XI.5 of the Employment Contract. The latter does not provide for any hierarchy of norms. It rather appears that the clause in question merely lists the various applicable legal regimes that may be applicable to the case at hand. This follows from the fact that the wording of Clause XI.5 of the Employment Contract only refers to “and” instead of “additionally” or “subsidiarily” and therefore does not give precedence to Hungarian law over the rules and regulations of FIFA.

110. Thus, in light of the above, the Panel finds that the dispute in question must be resolved firstly according to the “applicable regulations”, i.e. the rules and regulations of FIFA (including the FIFA RSTP and Article 57(2) of the FIFA Statutes). In addition, the “applicable regulations” provide that Swiss law shall be applied subsidiarily, i.e. when applying and interpreting the various FIFA regulations. For all questions not covered by the “applicable regulations”, the Panel will resort to the “rules of law” chosen by the Parties, i.e. Hungarian law.

111. The above finding is in line with CAS jurisprudence. In CAS 2017/A/5341, the panel found as follows:

“In the matter at hand, the parties have, besides the above-mentioned implicit and indirect choice of law, however, also made an explicit choice of law […] for the application of Russian law.

[…] Article R58 of the CAS Code serves to restrict the autonomy of the parties, since even where a choice of law has been made, the ‘applicable regulations’ are primarily applied, irrespective of the will of the parties. (..) Hence any choice of law made by the parties does not prevail over Art. R58 of the CAS Code, but is to be considered only within the framework of Art. R58 of the CAS Code and consequently affects only the subsidiarily applicable law …’

A further question arises as to the relation between the parties’ explicit choice of law in the Employment Contract and the reference in Article 57(2) FIFA Statutes to the subsidiary application of Swiss law.

According to [legal literature] in appeal arbitration proceedings [Article R58 of the CAS Code] assumes that the federation regulations take precedence. Consequently, the rules and regulations of a federation also take precedence over any legal framework chosen by the parties (..). If, therefore, the federation rules provide that Swiss law is to be applied additionally (to the rules and regulations of FIFA) then this must be complied with by the Panel. (..) Where [Article 57(2) of the FIFA Statutes] ‘additionally’ refers to Swiss law, such a reference only serves the purpose of making the RSTP more specific. In no way is the reference to Swiss law intended to mean that in the event of a conflict between the RSTP and Swiss law, priority must be given to the latter. (..) Consequently the purpose of the reference to Swiss law in [Article 57(2) FIFA Statutes] is to ensure the uniform interpretation of the standards of the industry. Under [Article 57(2) FIFA Statutes], however, issues that are not governed by the RSTP should not be subject to Swiss law’ … While [this] is not binding on the Panel, the Panel finds it persuasive in its approach”.

112. The Panel is, thus, satisfied that primarily the various rules and regulations of FIFA apply to the merits of this appeal, in particular the FIFA RSTP. Swiss law only serves the purpose to interpret the above rules and regulations. Hungarian law will apply to any matters not covered by the FIFA regulations.

113. As for the question which version of the FIFA RSTP apply, the Panel is mindful of Article 26 (1) of the FIFA RSTP (version 2021), which reads as follows:

“Any case that has been brought to FIFA before these regulations come into force shall be assessed according to the previous regulations”.

114. The FIFA RSTP (version 2021) entered into force on 4 December 2020. The Respondent initiated the proceedings before the FIFA PSC on 30 April 2020, thus, well before the entering into force of the new FIFA RSTP. Thus, it is the FIFA RSTP 2020 that apply to the case at hand. The Panel notes that the FIFA RSTP 2020 only regulate questions of competence of the FIFA adjudicatory organs in relation to disputes involving coaches (Article 22 of the FIFA RSTP 2020). Unlike the FIFA RSTP 2021, the FIFA RSTP 2020 do not provide for substantive provisions in relation to the employment of coaches. Furthermore, it is standing jurisprudence of the CAS that the provisions on players contained in the FIFA RSTP do not apply by analogy to coaches (CAS 2015/A/4161). It follows from the above that the scope of application of Hungarian law being the “rules of law” chosen by the Parties is quite considerable in the case at hand.

X. MERITS

115. The relevant questions that the Panel needs to answer in this appeal can be grouped into four sets of issues:

i. Does the Respondent have standing to be sued alone?

ii. In case the previous question is answered in the affirmative, did the Single Judge correctly accept jurisdiction to adjudicate and decide on the Coach’s claim against the Club?

iii. In case the previous questions is answered in the affirmative, should the Appealed Decision be annulled for procedural flaws?

iv. In case the previous question is answered in the affirmative, did the Club have just cause to terminate the Employment Contract prematurely and, if so, what are the consequences thereof?

A. Does the Respondent have Standing to be Sued alone?

116. The Respondent submits that he has no standing to be sued. He refers to the letter of FIFA dated 25 March 2021 in which the FIFA stated that “in the present proceedings, FIFA is the only entity with a disputed right at stake and with a legitimate interest in relation to its prerogative to establish whether its deciding body has jurisdiction or not […]”. By contrast, the Appellant submits that the dispute before the CAS is of a purely civil law nature. FIFA only acted as an adjudicatory body in order to solve the employment-related dispute between the Club and the Coach.

1. Question on the Merits

117. At the outset, the Panel notes that the question of standing is a matter of substantive law. This has also been confirmed by well-established CAS jurisprudence (see CAS 2020/A/7356; CAS regulations and – in case of a lacuna – Swiss law (see supra paras 112 et seq.). Such finding is backed by CAS jurisprudence. In CAS 2016/A/4836 para 116, the panel rightly found as follows:

“As established above, (…) [Article 58 (1) of the] FIFA Statutes dictates that any appeals against decisions of a body such as the FIFA PSC should be lodged with the CAS. It does not specify which party the appeal should be brought against i.e. which party has standing to be sued. This lacuna can be filled using Swiss law and in particular article 75 of the SCC”.

2. Vertical Disputes versus Horizontal Disputes

118. Article 75 of the Swiss Civil Code (“SCC”) foresees that an appeal against a decision of an association must be brought against the association that has issued the decision. Thus, according to this provision, only the association has standing to be sued. Article 75 of the SCC, however, can only serve as a guidance if the dispute in question is akin to the matters dealt with in said

Article. The latter deals with disputes arising from a legal relationship (membership) between a member of an association and the association itself. Consequently, Article 75 of the SCC deals with a “vertical” dispute. However, as the panel in in CAS 2014/A/3489-3490 rightly noted, not all disputes pertaining to the life of an association are necessarily “vertical in nature”. Instead, there are also disputes that are qualified as “horizontal” in which FIFA does not assume executive, but only adjudicatory, powers without having any direct involvement. At para 119, the panel in CAS 2014/A/3489-3490 noted as follows:

“(…) if a party to an horizontal dispute adjudicated by a FIFA body – i.e., a dispute between two or more direct or indirect members of FIFA (such as clubs, players, agents or coaches) which does not involve FIFA’s disciplinary powers and where FIFA has nothing directly at stake – appeals to the CAS without summoning FIFA, the appointed CAS panel may still proceed to examine the matter and adjudicate the dispute. This is so because a decision adopted by a FIFA body on a dispute between its direct or indirect members, being a decision of an association, is not an award but it has a contractual value for the members of the association. (…)”

3. The Nature of the Dispute in Question

119. The Respondent is of the view that the matter at hand is a “vertical” rather than a “horizontal” dispute and that, therefore, he alone does not have standing to be sued. Since the Appellant failed to direct its appeal also against FIFA, the claim must be dismissed according to the Respondent. The latter relies on the FIFA letter dated 25 March 2021 that in turn refers to a CAS decision (CAS 2017/A/4836), in which the panel stated as follows:

“123. (…) notes above that certain decisions such as sporting sanctions or purely disciplinary issues, along with eligibility or registration matters (such as in CAS 2008/A/1639, as cited by Rubin Kazan), fall clearly within the ‘vertical’ criteria. The issue at hand does not concern sporting sanctions, etc., however, there was not an underlying decision taken by FIFA on the merits either.

124. The Panel takes the view that the matter at hand is clearly directed at FIFA. The contractual claim is not before this Panel. Mr. Gonzalez was quite particular with his prayers for relief. It was that the FIFA PSC was wrong to decline jurisdiction, that the Panel should overturn FIFA’s decision, tell FIFA that it does have jurisdiction and to take the case back to deal with it on the merits.

125. This is clearly a ‘vertical’ issue – a dispute between Mr. Gonzalez and FIFA. The Panel can see that Rubin Kazan has an indirect interest, but it would be able to advance its position on the merits before the FIFA PSC, should the matter have returned there. Article R57 of the CAS Code does provide the Panel with de novo powers and perhaps if both FIFA and Rubin Kazan had been summoned as respondents, then all parties may have asked the Panel to consider jurisdictional issues and subsequently the merits, but this can remain moot, as FIFA were not summoned”.

a) No uniform CAS jurisprudence

120. The Panel notes that the above jurisprudence is far from unanimous. In the case CAS 2016/A/4554, the previous instance (i.e. the FIFA PSC) had rejected the claim of a football agent against a player as “inadmissible”. The agent lodged an appeal against said decision to the

CAS solely against the player. The sole arbitrator in that case saw no issue of standing to be sued and set aside the first instance decision of FIFA even though the latter had not been called as a party by the agent.

121. In addition, in the case CAS 2013/A/3278, the FIFA PSC accepted competence and upheld the claim filed by a Brazilian Club against a Portuguese Club for compensation. The latter appealed against the decision of the FIFA PSC before the CAS. The appeal was solely directed against the Brazilian Club. Therein the Portuguese Club requested that the FIFA PSC decision be set aside for lack of competence. The panel in CAS 2013/A/4378 accepted the Brazilian’s Club standing to be sued and stated (under paras. 57 et seq.) as follows:

“57. […] the majority of the Panel takes the view that Appellant is in essence invoking a contractual right not to be subject to the obligation to pay contractual compensation to the Respondent based on a contractual right not to be sued in front of the Single Judge of the FIFA PSC. In other words, the Appellant’s prayers are aimed at obtaining the enforcement of contractual rights it alleges to own under the Second Agreement.

58. Thus, the majority of the Panel finds that in the circumstances of this case a decision concerning the competence of FIFA under its Transfer Regulations can be taken without FIFA being named as co-respondent because the Appellant’s claims involve its contractual rights and it has standing to sue with respect to those prayers for relief.

59. Furthermore, the Parties being bound by a bilateral contract under which the Parties' rights and obligations have not been assigned or taken over in any manner by a third party, the Respondent owns the corresponding contractual obligations and hence is the only person against whom the Appellant can seek to enforce them. FIFA, on the other hand, does not own any of the contractual rights or obligations in dispute and therefore has no standing.

60. In other words, respective rights and obligations of the Appellant and the Respondent as to the validity, scope and effects of the choice-of-forum clause and their financial rights and obligations under the contract are at stake – meaning that they respectively have standing to sue and to be sued.

61. The foregoing conclusion is reinforced by the fact that no fine or other form of sanction was inflicted on the Appellant by the Single Judge of the FIFA PSC or any other FIFA internal body, and the fact that FIFA itself elected to renounce taking part in the proceedings although under the FIFA Regulations it could have requested to participate as an intervening party”.

b) The nature of the dispute

122. The Panel finds that the nature of a dispute (“vertical” or “horizontal”) depends on what is claimed by the parties, i.e. the interests at stake. It is, thus, the matter in dispute that defines the nature of the dispute and not the reasons based on which an adjudicatory body dismisses or accepts a claim. The matter in dispute is defined by the requests of the parties and the facts underlying the respective requests. In the view of the Panel, the nature of the claim / appeal (“vertical” or “horizontal”) and also the matter in dispute stays the same before all instances. The function performed by the adjudicatory body in question does not vary depending on the legal reasons it invokes or that are invoked by the parties. The Panel, thus, finds that if the

dispute was horizontal in nature before the FIFA PSC, it also stays horizontal after being brought before the next instance, i.e. the CAS.

c) The interests of FIFA

123. The Panel has contemplated whether the case at hand affects the interests of FIFA to such an extent that it must be called as a party into this procedure, i.e. that the CAS cannot dispose over the rights and obligations at stake without FIFA being heard. The Panel is of the view that this threshold is not met in the case at hand. FIFA “merely” performed adjudicatory functions when providing its dispute resolution mechanism to the Parties at first instance. Furthermore, FIFA’s interests (when acting as a purely adjudicatory body) are not affected differently depending on the arguments invoked by the parties at first or second instance (jurisdiction, admissibility or merits). In all these cases, FIFA’s interest is rather general in nature, i.e. – in essence – that its rules and regulations are being applied and enforced between the stakeholders in the football industry.

124. Be it as it may, the Panel finds that the Appellant cannot be burdened with the question whether or not the (general) interests of FIFA are threatened to such an extent that FIFA must be found to have the right of standing to be sued. This would clearly be in conflict with the principle of legal security. Furthermore, the Panel is of the view that the question at hand does not fundamentally threaten FIFA’s interests. This case is about the interpretation of a contract entered into between the Parties and – more particularly – on the interpretation of a dispute resolution clause. It clearly does not “threaten the football system” in any way.

d) FIFA’s interests are sufficiently protected

125. The Panel also finds that FIFA’s interests in the case at hand are sufficiently taken care of and defended by the Respondent. The Panel refers in this respect to CAS 2020/A/7356 in which the sole arbitrator – in reference to CAS 2015/A/3910 – held as follows:

“[W]hen deciding who is the proper party to defend an appealed decision, CAS panels proceed by a balancing of the interests involved and taking into account the role assumed by the association in the specific circumstances. Consequently one must ask whether a party ‘stands to be sufficiently affected by the matter at hand in order to qualify as a proper respondent within the meaning of the law’ (cf. CAS 2017/A/5227, para. 35). Similarly, the CAS panel in 2015/A/3910 held as follows:

‘[T]he Panel holds that in the absence of a clear statutory provision regulating the question of standing to be sued, the question must be resolved on basis of a weighing of the interests of the persons affected by said decision. The question, thus, is who […] is best suited to represent and defend the will expressed by the organ of the association’”.

126. In the light of the above, the Panel finds that FIFA’s interests in no way differ from the interests of the Respondent, who equally wants the Appealed Decision to be upheld. In addition, the Panel notes that it is ultimately the Respondent who is solely competent to dispose of the claims in questions (e.g. by entering into a settlement agreement, acknowledging the claim filed, etc.).

He can do so without the involvement of FIFA. In particular, he does not need FIFA’s consent when settling the dispute inside or outside the court. All of this proves that FIFA in this case does not have an interest of its own worthy of protection, i.e. to be found to have standing to be sued in horizontal disputes to an extent that its absence in a proceeding is fatal.

127. On a final note, the Panel finds that if FIFA had taken the view that Respondent was not sufficiently able to protects its general interests, it could have requested to join these proceedings as a party, further to Article R41.3 of the CAS Code. In all appeal arbitration proceedings against decisions of the adjudicatory bodies of FIFA – even in case the appeal is not directed against it – FIFA is informed by the CAS Court Office of the statement of appeal filed further to Article R52 of the CAS Code and is invited to state whether it wishes to participate in the proceedings as a party, further to Article R41.3 of the CAS Code. In the case at hand, FIFA decided not to request to join the proceedings as a party, most likely because it thought that its (general) interests would be sufficiently taken care of and defended by the Respondent.

B. Did the FIFA PSC correctly accept jurisdiction?

128. The Appellant objects to the jurisdiction of the FIFA PSC and submits that the Respondent holds – inter alia – Hungarian citizenship and that, therefore, the dispute lacks an international dimension within the meaning of Article 22 lit. c) of the FIFA RSTP. Furthermore, the Appellant finds that the competence to decide employment-related disputes rests exclusively with the Hungarian courts because of the Parties’ agreement in Clause XI.4 of the Employment Contract. The Respondent, on the contrary, submits that the jurisdiction of the Single Judge follows from Clause XI.4 of the Employment Contract. Furthermore, the Respondent denied that he held Hungarian citizenship at the relevant moment in time during the dispute, but rather that he acquired it subsequent to the facts giving rise to the dispute.

1. The applicable provisions

129. Article 22 of the FIFA RSTP provides – in its pertinent parts – as follows:

“Without prejudice to the right of any player, coach, association, or club to seek redress before a civil court for employment-related disputes, FIFA is competent to hear:

c) employment-related disputes between a club and an association and a coach of an international dimension; the aforementioned parties may, however, explicitly opt in writing for such disputes to be decided by an independent arbitration tribunal that has been established at national level within the framework of the association and/or collective bargaining agreement. Any such arbitration clause must be included either directly in the contract or in a collective bargaining agreement applicable on the parties. The independent national arbitration tribunal must guarantee fair proceedings and respect the principle of equal representation of coaches and clubs; […]”.

130. In addition, Article 23(1) of the FIFA RSTP reads as follows:

“The Players’ Status Committee shall adjudicate on any of the cases described under article 22 c) and f) as well as on all other disputes arising from the application of these regulations, subject to article 24”.

131. Furthermore, Clause XI.4 of the Employment Contract states as follows:

“The Parties agree to resolve their disputes amicably, by way of negotiations. Should the Parties fail to resolve their dispute amicably, the Parties shall submit themselves – in the cases set out in the regulations of MLSZ and FIFA – to the competent department of MLSZ and FIFA, in the case of labour disputes to the competent Administrative and Labour Court and in every other case to the Permanent Court Arbitration pursuant to Section 47 of the Sports Act. The number of arbitrators shall be 3, the procedure shall be governed by the Procedural Rules of the Arbitration”.

2. The international dimension of the case

132. The nationality of a coach is an important factor when deciding whether a dispute has an international dimension according to Article 22 lit. c of the FIFA RSTP. There are CAS decisions that deny any international dimension in case the coach holds the nationality of the club or in case he holds dual citizenship (including the citizenship of the club). In CAS 2016/A/4441, the sole arbitrator held as follows (paras 8.5 et seq.):

“Initially, the Sole Arbitrator notes that the FIFA DRC is entitled, ex officio, to decide on its own competence, including the competence to determine whether or not a dispute is of an international dimension in accordance with the Regulations.

In order to decide on the existence of such international dimension in this particular case, it is first necessary to establish the time that is material to this assessment.

In connection with that, the Sole Arbitrator notes that it is undisputed between the Appellant and FIFA that at the time of signing the Contract with the First Respondent, i.e. in January 2011, the Appellant held Dutch nationality only.

However, the Sole Arbitrator is in agreement with the FIFA DRC in its decision that the analysis of the Appellant’s nationality should be made at the time of the event giving rise to the dispute, and not the time of the signing of the Contract.

In this particular case, the events giving rise to the dispute are the alleged non-payments of costs and salaries to the Appellant for the months of March, April and May 2012, which, according to the Contract, fell due “on 30th date of each month”, for which reason the Sole Arbitrator considers this to be the relevant time for the analysis of whether or not this case is of a international dimension in accordance with Article 22 of the Regulations. …

As it can be assumed in these circumstances that the Appellant, at the relevant time when the dispute arouse, had obtained and held Indonesian citizenship, it is up to the Sole Arbitrator to assess whether the fact that the Appellant at the same time held Dutch nationality provides the necessary international dimension to the case in order for the FIFA DRC to be competent to decide the case. …”.

133. It follows from the above that the decisive moment in time to assess the international dimension of a case is the moment the dispute arises. It may be debatable when a dispute arises, i.e. whether this is the moment of the alleged breach of contract or the moment a claim is filed. However,

the Panel does not need to decide this controversy, since – undisputedly – the Respondent only held Montenegrin citizenship at both moments in time. The Panel does not agree with the Appellant that the nature of a dispute (national / international) may change over the course of the pending proceedings. Instead, the Panel is of the firm view that the principle of perpetuatio fori must apply. According thereto, a court remains competent even if the facts establishing its competence cease to exist after lis pendens has arisen.

3. The Parties’ agreement in Clause XI.4 of the Employment Contract

134. As a starting point, the Panel notes that both Parties are indirectly affiliated to FIFA and, therefore, subject to the FIFA regulations (including the FIFA RSTP). Furthermore, the Panel notes that the Parties have submitted themselves in the Employment Contract – inter alia – to the FIFA regulations. Therefore, Articles 22 et seq. of the FIFA RSTP apply, in principle, to this matter.

a) Do the Parties have the autonomy to opt out of Article 22 lit. c) of the FIFA RSTP?

135. According to Article 22 lit. c) of the FIFA RSTP, FIFA’s competence in employment-related disputes is not absolute. According to the first sentence of Article 22 FIFA RSTP, FIFA is only competent subject to “to the right of any player, coach, association, or club to seek redress before a civil court”. Article 22 of the FIFA RSTP, thus, provides a right for the parties to seek redress either before FIFA’s adjudicatory bodies or before local courts. In case the parties opt for a local forum, the FIFA adjudicatory bodies are no longer competent.

136. The question is, whether the parties to an employment contract can limit such choice provided for in Article 22 of the FIFA RSTP by entering into an agreement that obligates a party seeking judicial recourse to do so before the local forum only. The Panel finds that the parties, in principle, have such autonomy (cf. also CAS 2016/A/4554 paras 60 et seq.). This follows from Article 22 lit. c) of the FIFA RSTP that provides that the parties can substitute the FIFA adjudicatory bodies with “an independent arbitration tribunal”. If, however, the parties can substitute one option through another option, the better arguments speak in favour of granting the parties full autonomy with respect to the competent adjudicatory instance. Thus, the Panel finds that parties may enter into a contractual or procedural agreement that excludes recourse to FIFA and obliges them to seek judicial redress only before the local courts. For purely informative purposes and merely as a subsidiary note, the Panel wishes to make reference to CAS 2013/A/3278, where the panel found at paras 66 et seq. as follows:

“66. At the same time, under the freedom of contract and Swiss provisions on choice-of-forum clauses (e.g. article 5 of the PIL Act and article 17 of the CPC) parties to an international contract are entitled to include a choiceof-forum clause in their contract; and under Swiss law, a choice-of-forum clause is deemed exclusive, unless expressly provided otherwise.

67. Consequently, in light of the above legal framework, the question here is whether in the circumstances of this case, the Appellant and the Respondent could validly include a choice-of-forum clause in their Second Agreement and, if so, whether it also had the effect of excluding the competence of the FIFA internal bodies (in this case the

Single Judge of the FIFA PSC) as the primary instance to pronounce itself on a dispute deriving from their contract.

68. With respect to the first aspect, given that we are dealing with an international contract between indirect members of FIFA and a purely contractual dispute which does not involve FIFA as a party or any sanctions taken by FIFA, the Panel finds that under Swiss law the Appellant and Respondent were entitled to validly adopt between themselves a choice-of-forum clause in favour of State courts (here the common courts of Funchal’s Judicial District).

69. Concerning the second aspect, i.e. the scope of the parties' contractual choice-of-forum clause/exclusion of FIFA's competence, the majority of the Panel finds that the intent of the parties to the Second Agreement was clearly to choose the common courts of Funchal’s Judicial District as the only body to decide any contractual dispute between them, since clause 5 of the Second Agreement refers to those courts ‘For all legal consequences…’ and there is no wording included which indicates the parties deemed the Portuguese courts in question would merely be an appellate body against a primary decision by FIFA; while at the same time this was a commercial contract and there is a presumption under Swiss law that a choice-of-forum is exclusive.

70. For the above reasons, the majority of the Panel finds that when including clause 5 in the Second Agreement the parties’ intention was to exclude – in favour of the common courts of Funchal’s Judicial District – any resort to a FIFA body in case of a dispute, and finds that such choice of the parties was valid under Swiss law”.

137. On a further purely subsidiary note, the Panel also refers to a decision of the FIFA Dispute Resolution Chamber dated 25 February 2020 (Petkovski v/ Vicente et al), in which the adjudicatory body found as follows.

“II.6. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 of the Regulations, FIFA is competent to hear employment-related disputes between a player and a club with an international dimension ‘without prejudice to the right of any player or club to seek redress before a civil court for employment related disputes’.

II.7. In the present matter, the DRC duly noted that the player and the club had unambiguously and exclusively decided that any dispute that would arise from the contract would be the ‘Labor Court of the Judicial Court of Barcelos’.

II.8. The DRC recalled that parties may freely agree to give jurisdiction to a civil court, and that such choice shall always prevail. In fact, the Chamber, recalling its jurisprudence as well as CAS jurisprudence in this regard, and in particular CAS 2013/A/3278, highlighted that even if the choice of law does not specify which courts are competent (e.g. a generic reference is made to a region/city), FIFA is not competent when the parties have exclusively agreed to the jurisdiction of a civil court. In addition, the DRC emphasized that art. 22 of the Regulations provide a clear hierarchy in favor of contractual autonomy.

II.9. In view of all the above, the Chamber concluded that it was not competent to hear the dispute between the player and club, and consequently declared the claim of the player inadmissible”.

138. The Panel is well aware that Article 22 of the FIFA RSTP is an important pillar of legal protection for the persons belonging to the football industry. Only before the FIFA

adjudicatory bodies will the protections provided for in the FIFA RSTP be enforced and guaranteed. Thus, an opting out from Article 22 lit. c) of the FIFA RSTP should not be accepted easily. Only where such opting out was entered into by the Parties freely and willingly should such agreement be accepted in order to avoid any misuse undermining access to justice under Article 22 of the FIFA RSTP. In the case at hand, nothing points towards such misuse by one of the Parties. It was not submitted that there was unequal bargaining power between the Parties, that the choice of the forum was arbitrary or detrimental from the outset for any of the Parties or that undue influence (whether economic or otherwise) had been exercised to pressure a party into acceptance of the terms and conditions of the Employment Contract. Thus, the Panel accepts that in the case at hand an opting out of Article 22 of the FIFA RSTP provided that such intention of the Parties can be derived from Clause XI.4 of the Employment Contract.

b) Did the Parties opt out of Article 22 lit. c) of the FIFA RSTP?

139. Whether the Parties wanted the employment-related dispute to be decided solely by the Hungarian courts needs to be assessed through interpretation of the relevant clause of the Employment Contract. The Panel applies Swiss law to this question of interpretation, since the adjudicatory body that has been allegedly derogated from (FIFA PSC) is located in Switzerland. Furthermore, the Parties have not submitted that applying Hungarian law to this question of interpretation would lead to a different outcome. The relevant part of the Clause XI.4 of the Employment Contract reads as follows:

“[…] the Parties shall submit themselves – in cases set out in the regulations of MLSZ and FIFA – to the competent department of MLSZ and FIFA, in the case of labour disputes to the competent Administrative and Labour Court and in every other case to the Permanent Court Arbitration pursuant to Section 47 of the Sports Act”.

140. The clause is – at first sight – not very clear. It refers to four different adjudicatory bodies, i.e. MLSZ, FIFA, the Administrative and Labour Court and to the Permanent Court Arbitration. All these different fora are – according to the will of the Parties – not competent alternatively or concurrently. This follows from the wording of the clause according to which – e.g. – the departments of FIFA and MLSZ are only competent “in cases set out in [their respective] regulations”. Furthermore, the clause provides that the Hungarian Administrative and Labour Court shall only be competent for “labour disputes” and that “in every other case” the Permanent Court Arbitration shall be competent. Thus, it follows from an interpretation of the clause that each of the different fora shall be – according to the will of the parties – competent for specific types of disputes only.

141. The question at stake is what jurisdiction shall be competent, if there is – contrary to the assumption of the Parties – an overlap between the competences of the different fora, i.e. in case not only the state courts but also FIFA adjudicatory bodies are, in principle, competent to deal with the labour disputes (Article 22 of the FIFA RSTP). Such jurisdictional conflict may be solved – in principle – either by giving preference to the FIFA bodies or to the local courts. The Panel finds that – when interpreting the clause in light of the principle of good faith – the latter interpretation best reflects the interests and intentions of the Parties. By referring explicitly to “labour disputes” and conferring jurisdiction for such disputes expressly to the state courts, the

Parties wanted to establish exclusive jurisdiction in favour of such courts. Since the present case is – undisputedly – an employment-related dispute, it follows from Clause XI.4 of the Employment Contract that the Parties bindingly conferred jurisdiction to the competent Administrative and Labour Court in Hungary to adjudicate and decide the matter between them. In addition, the Panel notes that the competence of the local court was not restricted to national or local disputes. Instead, the Clause XI.4 of the Employment Contract states that Hungarian courts are competent for all matters pertaining to labour disputes. Thus, based on the principle of reasonableness and good faith, the Panel finds that the Parties by agreeing on Clause XI.4 excluded the option to seek redress before the FIFA organs in labour-relate disputes and opted for a single forum, i.e. the competent national “Administrative and Labour Court in Hungary”. Such agreement shall override the FIFA rules and regulations, particularly Articles 22 and 23 of the FIFA RSTP.

c) Did the Appellant forego its right to object to FIFA jurisdiction?

142. The Respondent submits that the Appellant – in any event – forfeited its right to object to FIFA’s jurisdiction. The Panel does not agree with this proposition. The Panel notes that the Appellant did not enter unconditional appearance before the FIFA PSC and did not thereby accept FIFA jurisdiction. The Appellant filed its objections in this respect before the FIFA PSC. The Panel also notes that the Appellant’s submissions were not taken into account by the Single Judge because they were filed late. A default of a party to (timely) participate in adjudication proceedings, however, cannot be qualified as a tacit acceptance of competence of the adjudicatory body in question. Instead, it is the Panel’s view that the FIFA bodies must assess their jurisdiction ex officio in such case.

143. The Panel also contemplated whether the Appellant forewent its right to object to FIFA’s competence by accepting the jurisdiction of the CAS. The Panel, however, finds that this is not the case. First, the Panel notes that the Appellant’s principal claim is to “rejecting the claim of the Respondent brought before the Committee in the absence of jurisdiction of the Committee over the claim”. Thus, by appealing to the CAS, the Appellant did not accept the competence of the previous instance. Second, the Panel finds that such procedural behavior of the Appellant is not contradictory. In case the FIFA adjudicatory body wrongly accept jurisdiction there must be a way of access to justice for the Appellant to set aside such decision. This is all the more true considering that a FIFA decision can be enforced against a party outside the court enforcement system.

C. Conclusion

144. To conclude, the Panel finds that the Parties have contractually derogated from the default competence of the Single Judge pursuant to Article 22 lit. c) of the FIFA RSTP. Clause XI.4 of the Employment Contract explicitly gives precedence to the jurisdiction of the competent Hungarian Administrative and Labour Court in employment-related disputes. Consequently, the FIFA PSC did not have jurisdiction to decide the matter and the Appealed Decision must be set aside.

145. Since the Panel in appeals arbitration proceedings is only mandated to decide the dispute within the limits of the previous instance, it cannot enter into the merits of the case, but must accept the appeal and set aside the Appealed Decision.