Al Batin FC v. Fédération Internationale de Football Association (FIFA), Mohamed Rayhi

II. FACTUAL BACKGROUND — A. Background facts

5. Below is a summary of the relevant facts and allegations based on the Parties’ written submissions and evidence adduced in these proceedings. References to additional facts and allegations found in the Parties’ written submissions and evidence will be made, where relevant, in connection with the legal analysis that follows. While 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 submissions and evidence he deems necessary to explain his reasoning.

B. The relationship between the Club and the Player

6. On 1 October 2020, the Club and the Player signed an employment contract (the “Employment Contract”). The main characteristics of this document can be summarised as follows:

- It is a fix-term agreement effective as from 30 September 2020 until 30 June 2022.

- Its Clause 4 reads as follows, where pertinent:

“1- the parties agreed that the total value of the contract is (1.155.000 Euro) […]. 2- The total amount of the contract shall be divided on the 2 contractual years as follows: a) In the first-year season 2020/2021, the [Club] agreed to pay to the [Player] the total value of (605.000. euro) […] b) In the second-year season 2021/2022, the parties agreed that the total value is (550.000 euros) […] divided as salaries on the 12 months of the second season (45,833 euros x 12 months) Due at the end of each month starting from July 2021. - In the event [the Club] fails to comply with the payment of any of the aforementioned instalment within the agreed deadline, [the Player] will send a 15-days default notice to [the Club]. In the event [the Club] does not comply with said payment within the 15 days deadline granted, default interest at a rate of 5% per annum will apply as from the agreed deadline until the effective date of payment. […] All amounts provided are understood to be net of all types of taxes, withholdings, income and payments on account, rates and / or any present or future tax that will be applicable to said income in KSA, in such a way that [the Club] undertakes to pay [the Player] the corresponding gross amount at all times so that the liquid amounts committed to [the Player] in each case are reached”.

- Clause 9 of the Employment Contract, entitled “Settlement of Disputes”, states the following:

“1- The parties shall seek solving their disputes on enforcement of the contract by amicable ways. 2- This Contract shall be governed by and construed in accordance with the FIFA Regulations. Any dispute arising out of or in connection with this Agreement shall be subject to the jurisdiction of the FIFA and on appeal (or in the event that FIFA declines jurisdiction) to the CAS to be finally settled in accordance with the rules of the Code of Sports Related Arbitration, which rules are hereby deemed incorporated. The FIFA and the CAS shall determine the dispute in accordance with the FIFA Regulations. The CAS proceedings shall be held in the English language”.

7. It is undisputed that the Player’s wages were paid until March 2022.

8. On 5 July 2022, the Player’s representative put the Club on notice to pay EUR 137,499, corresponding to unpaid wages for the months of April, May and June 2022 (3 x EUR 45,833 = EUR 137,499). He “[granted] the Club a deadline of 15 (fifteen) days to fully comply with its financial obligations”.

C. The Proceedings before the FIFA Dispute Resolution Chamber

9. On 12 August 2022, the Player lodged a claim before the FIFA Dispute Resolution Chamber (the “DRC”) against the Club, requesting the following:

“[…]

2. To order the [Club] to pay the [Player] the overdue salaries in the total amount of EUR 137,499 Euros net […]. 3. To order the [Club] to pay the [Player] the agreed penalty at a rate of 5% per annum of the overdue amounts as of the date of default until the full payment under Item 4 to the relevant employment contract 4. To order the [Club] to pay the [Player] a legal interest at the rate of 5% per annum of the overdue amounts, as of the date of default until the effective payment”.

10. On 11 September 2022, the Club submitted its reply to the claim, whereby it acknowledged its debt towards the Player. However, the Club argued that the applicable interest should start to accrue as from “the date of the judgement”.

11. In a decision dated 13 October 2022, the DRC partially accepted the Player’s claim based upon the following considerations:

- The Club acknowledged that it was liable to pay to the Player EUR 137,499. This amount corresponds to the outstanding salaries for the months of April, May and June 2022 and has never been remitted to the Player. This amount “should be awarded in line with the general legal principle pacta sunt servanda”.

- “In addition, taking into consideration the player’s request as well as the constant practice of the DRC in this regard, the latter decided to award the player interest at the rate of 5% p.a. on the outstanding amounts as from each respective due date (i.e. the first day of each subsequent month) until the date of effective payment”.

- Contrary to the Player’s assertion, the Employment Contract does not contain a penalty clause requiring the Club to pay a compensation of 5% per annum of the outstanding amounts.

- The requirements of Article 12bis of the applicable Regulations on the Status and transfer of Players (“RSTP”) were met, giving the DRC the “competence to impose sanctions on the club. On account of the above and bearing in mind that the club is a repeat offender, the DRC decided to impose a fine on the club in accordance with article 12bis par. 4 lit. c) [RSTP]. […] Furthermore, the DRC regarded a fine amounting to USD 25,000 as appropriate and hence decided to impose said fine on the club. […] In this connection, the Chamber wished to highlight that a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty in accordance with article 12bis par. 6 [RSTP]”.

12. As a result, on 13 October 2022, the DRC issued the following decision (with emphasis):

“[…] 1. The claim of the [Player] is partially accepted. 2. The [Club] has to pay to the [Player] the following amount(s):

• EUR 45,833 net as outstanding remuneration plus 5% interest p.a. as from 1 May 2022 until the date of effective payment;

• EUR 45,833 net as outstanding remuneration plus 5% interest p.a. as from 1 June 2022 until the date of effective payment; and

• EUR 45,833 net as outstanding remuneration plus 5% interest p.a. as from 1 July 2022 until the date of effective payment. 3. Any further claims of the [Player] are rejected. 4. Full payment (including all applicable interest) shall be made to the bank account indicated in the enclosed Bank Account Registration Form. 5. Pursuant to art. 24 [RSTP], if full payment (including all applicable interest) is not made within 45 days of notification of this decision, the following consequences shall apply: 1. The [Club] shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid. The maximum duration of the ban shall be of up to three entire and consecutive registration periods 2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee in the event that full payment (including all applicable interest) is still not made by the end of the three entire and consecutive registration periods. 6. The consequences shall only be enforced at the request of the [Player] in accordance with art. 24 par. 7 and 8 and art. 25 of the Regulations on the Status and Transfer of Players. 7. The [Club] is ordered to pay a fine of USD 25,000 to FIFA within 30 days of the notification of this decision. […] 8. This decision is rendered without costs”.

13. On 1 November 2022, the Club and the Player were notified of the decision issued by the DRC (the “Appealed Decision”).

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

14. On 22 November 2022, the Cub lodged its Statement of Appeal with the Court of Arbitration for Sport (“CAS”) against the Appealed Decision in accordance with Article R47 et seq. of the Code of Sports-related Arbitration (the “Code”).

15. On 23 November 2022, the CAS Court Office acknowledged receipt of the Club’s Statement of Appeal and of its payment of the CAS Court Office fee. It invited the Respondents to comment within five days on the Club’s request to refer the present matter to a sole arbitrator. With this respect, the Respondents’ attention was drawn to the fact that in the absence of an

answer or in case of disagreement, it would be for the President of the CAS Appeals Arbitration Division, or her Deputy, to decide the issue, taking into account the circumstances of the case, in accordance with Article R50 of the Code. The Respondents were also required to state within three days whether they accepted the Club’s petition for a 10-day extension of its deadline to file its Appeal Brief.

16. Whereas the Player did not answer to the letter of the CAS Court Office of 23 November 2022, on 24 November 2022, FIFA informed the CAS Court Office that it did not object to the Club’s application for an extension of the deadline to file its Appeal Brief and agreed to refer the present matter to a sole arbitrator, “as long as he/she is selected from the football list”.

17. On 7 December 2022, the CAS Court Office informed the Parties that the Club’s time to file its Appeal Brief was extended by 10 days and that the President of the CAS Appeals Arbitration Division had decided to refer the present matter to a sole arbitrator.

18. On 16 December 2022, the CAS Court Office informed the Parties that the Deputy President of the CAS Appeals Arbitration Division had appointed Mr Patrick Grandjean, Attorney-atlaw, Belmont, Switzerland as Sole Arbitrator.

19. On 22 December 2022 and within the extended time-limit, the Club filed its Appeal Brief in accordance with Article R51 of the Code.

20. On 23 January 2023, the Player filed his Answer in accordance with Article R55 CAS Code.

21. On 6 February 2023 and within the extended time-limit, FIFA filed its Answer in accordance with Article R55 CAS Code.

22. On 7 February 2023, the CAS Court Office invited the Parties to state by 14 February 2023 whether their preference was for a hearing to be held in the present matter.

23. Within the granted deadline, the Respondents confirmed to the CAS Court Office that they preferred for the matter to be decided solely on the basis of the Parties’ written submissions, whereas the Club requested that a hearing to be held.

24. On 20 February 2023, the CAS Court Office informed the Parties that the Sole Arbitrator had decided not to hold a hearing and sent them the Order of Procedure which was returned duly signed by the Respondents on 20 February 2023 and by the Club on 27 February 2023, without reserves.

IV. SUBMISSIONS OF THE PARTIES — A. The Appellant

25. In its Statement of Appeal, the Club submitted the following requests for relief (with emphasis):

“The [Club] requests the Honorable Panel, as follows:

1. To accept this appeal against the Decision of the FIFA decision that was passed in Zurich on the 13 October 2022 and notified to the parties with Grounds on 01 November 2022. 2. To adopt an award annulling said decision and declaring that: 2.1. The First Respondent isn’t entitled to any amounts; 2.2. To annul and cancel the Second Respondent’s imposed fine of USD 25,000. 2.3. To condemn the First Respondent to the payment of the whole CAS administration costs and the Arbitrator's fees. 2.4. Awarding any such other relief as the Panel may deem necessary or appropriate”.

26. The submissions of the Club are reported below:

- “[The] factual background of the case at stake is exceptionally straightforward”.

- “It is undisputed that the Club paid to the Player all his financial dues until the end of March 2021/22. […] As a gesture of the Club’s good faith and intention to keep its relationship with the Player good and respectful until the very end, the club admits to pay him the 3 months installment (April, May, June)”.

- “[In] case the court admitted the 5% interest, we claim that the due date takes consideration from the date of the judgment”.

27. No other submissions have been made by the Club in its Appeal Brief.

B. The Respondents

a) The Player

28. The Player submitted the following requests for relief:

“In light of the above, the Player herein respectfully requests the Court of Arbitration for Sport to rule as follows: 1. To dismiss the Appeal filled by the Club against the Player & FIFA with respect to the Decision passed by the Dispute Resolution Chamber of the FIFA Football Tribunal on the 13th of October 2022 with the reference No. FPSD-7047, communicated to the Parties with grounds on the 1st of November 2022; 2. To confirm the Decision passed by the Dispute Resolution Chamber of the FIFA Football Tribunal on the 13th of October 2022 with the reference No. FPSD-7047, communicated to the Parties with grounds on the 1st of November 2022; 3. To condemn the Appellant to the payment of the whole CAS administration cost and the Arbitrators fees; and 4. To fix a sum of 20,000 CHF to be paid by the Appellant to the Player to help the payment of his legal fees covering the costs of its legal representation in front of the Court of Arbitration for Sport”.

29. The submissions of the Player, in essence, may be summarized as follows:

- In these arbitral proceedings, the Club has admitted that it had to pay EUR 137,499 to the Player and failed to submit any argument seeking to reduce the fine imposed upon it by the DRC. In these circumstances, it is clear that the only reason for the appeal is to delay the execution of the Appealed Decision.

- The Club has acted in a similar way in at least one other case.

- The Club failed to comply with its financial obligations towards the Player, in breach of the Employment Contract and of the pacta sunt servanda principle, recognized by the wellestablished jurisprudence of the CAS as well as of the DRC and implemented in Article

- The Player has put the Club on notice to pay his outstanding wages in accordance with the terms of the Employment Contract and of Article 12bis RSTP. “Consequently, the Player is entitled to receive from the Club the outstanding salaries (overdue payables) plus corresponding default interest”, which begins to accrue from the first day following the end of each month for which the salary fell due.

- The fine imposed upon the Club is a direct consequence of its failure to comply with the Employment Contract. “In the case at hand, the sanction imposed on the Appellant is neither evidently, nor grossly disproportionate to the offence of the Club, who failed to comply with its financial obligations towards the Player. Moreover, the Club is a constant offender, as established by the FIFA DRC (and not challenged by the Club)”.

b) FIFA

30. FIFA submitted the following requests for relief:

“Based on the foregoing, FIFA respectfully requests CAS to issue an award on the merits: (a) rejecting the reliefs sought by the Appellant; (b) confirming the Appealed Decision; and (c) ordering the Appellant to bear the full costs of these arbitration proceedings”.

31. The submissions of FIFA, in essence, may be summarized as follows:

- The Club’s line of defence is contradictory and difficult to follow as, on the one hand, it “admits to pay [the Player] the 3 months installment (April, May, June)” but, on the other hand, it requests the CAS to establish that the Player “isn’t entitled to any amounts”.

- In view of the Club's acknowledgement of its debt and the absence of any argument or evidence that the Player is not entitled to his wages, the Club is liable for the payment of the amounts set out in the Appealed Decision.

- “According to FIFA and CAS jurisprudence (based on Swiss law), when a deadline for performance of the obligation has been set by agreement, the obligor is automatically in default after such deadline expires. Therefore, the default interest shall be accrued from the day after the instalment became due”. The DRC correctly held that the calculation of the contractually agreed interest payment of 5% must be made from the day following the due date of each unpaid monthly salary.

- The Club simply asks the CAS to “annul and cancel the […] imposed fine of USD 25,000”, without supporting its request with any argument or evidence. In the case at hand, the requirements of Article 12bis RSTP were met and the DRC correctly imposed a disciplinary sanction upon the Club in accordance with the terms of Article 12bis (4) RSTP. The DRC has full discretion to impose one of the sanctions provided for in this provision and, considering the specific circumstances of the matter at hand, it rightfully decided to impose a fine of USD 25,000.

- The sanction imposed upon the Club is proportionate and justified in light of the Club’s failure to comply with its financial obligations towards the Player. “The [Club] has not contested the proportionality of the fine and, therefore, it shall be confirmed by the Sole Arbitrator”. “Moreover, […] the fine imposed on the [Club] is also adequate considering that the Club is a repeated offender (a fact not contested by the [Club]), which is an aggravating circumstance and leads to a more severe penalty under Article 12bis (6) RSTP”.