contractual stability between players and clubs in the light of art. 17(1) rstp

Contractual stability between Contractual stability between players and clubs in the light of players and clubs in the light of

Art. 17(1) RSTPArt. 17(1) RSTP

Resort Svatá Kateřina – PočátkyResort Svatá Kateřina – Počátky 23-24 April 201323-24 April 2013

First Czechoslovak sports law conference

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Historical BackgroundHistorical Background

Principles of the FIFA Regulations since 2001 : Protection of minors Training of young players Solidarity in the football world Contractual stability Dispute resolution system


CAS AwardsCAS Awards CAS 2007/A/1359 FC Pyunik Yerevan v/Edel

Edima Bete, AFC Rapid Bucaresti & FIFA CAS 2007/A/1519 & 1520 FC Shakhtar Donetsk v/

Mr. Matuzalem Francelino da Silva & Real Zaragoza SAD

CAS 2009/A/1880 & 1881 FC Sion & Essam El-Hadary v/ FIFA & Al Ahli Sporting Club

CAS 2010/A/2145, 2146 & 2147 Morgan de Sanctis & Sevilla FC SAD v/ Udinese Calcio SpA


Application and aim of Application and aim of the FIFA Regulationsthe FIFA Regulations

The application:• Cases with an international dimension;• Cases with ITC request;• Dispute Resolution Chamber – CAS;• Federations responsible for national

disputes (NDRC & arbitration tribunals).

The aim: maintainance of contractual stability between clubs and players.

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The law applicable to the meritsThe law applicable to the merits

Art. 187 PILAArt. 187 PILA: law chosen by the parties;: law chosen by the parties; Not only national law, but also the Not only national law, but also the

regulationsregulations of an international sports of an international sports federation;federation;

Art. R58Art. R58 CAS Code of Sport-related CAS Code of Sport-related Arbitration.Arbitration.


The law applicable to the meritsThe law applicable to the meritsArt. R58 CAS CodeArt. R58 CAS Code: :

applicable regulationsapplicable regulations and law chosen by the and law chosen by the parties; parties;

if no choice: laws of the country where if no choice: laws of the country where federationfederation that issued challenged decision is that issued challenged decision is domiciled. domiciled.

Parties usually choose subsidiary Parties usually choose subsidiary application of application of Swiss law:Swiss law: expresslyexpressly or or in concludent wayin concludent way: through application of FIFA : through application of FIFA

regulations in relation with Art. 66(2) FIFA Statutes regulations in relation with Art. 66(2) FIFA Statutes („(„CAS shall primarily apply the various regulations of FIFA and, CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss lawadditionally, Swiss law.“ - .“ - Only to Only to fill lacunae fill lacunae in the RSTP in the RSTP or FIFA Statutes)or FIFA Statutes)


The law applicable to the meritsThe law applicable to the merits

Competence clause in the Competence clause in the employment contractemployment contract

• National law applicable;National law applicable;• Tailor-made solution for football?Tailor-made solution for football?• Sporting sanctions;Sporting sanctions;• Subsequent choice of law prevails on the Subsequent choice of law prevails on the

applicable law in the contract. applicable law in the contract.


Chapter IV – Maintenance of Contractual Chapter IV – Maintenance of Contractual Stability between Professionals and ClubsStability between Professionals and Clubs

Art. 13 - Respect of ContractA contract between a Professional and a club may only be terminated on expiry of the term of the contract or by mutual agreement.

Art. 14 - Terminating a Contract for Just CauseA contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) in the case of just cause.


Just CauseJust Cause No definitionNo definition in RSTP, in RSTP, therefore therefore Swiss lawSwiss law.. Not every violation of the employment contract Not every violation of the employment contract

justifies the termination of the contract for just justifies the termination of the contract for just cause. cause.

Severe violationSevere violation of the employment contract; of the employment contract; serious breach of confidence.serious breach of confidence.

Innocent party cannot be expected in good Innocent party cannot be expected in good faith to continue the employment faith to continue the employment relationshiprelationship (Art. 337.2 CO)(Art. 337.2 CO)

To be established on a case by case basis.To be established on a case by case basis. Only what occurred before the termination is Only what occurred before the termination is

relevant.relevant.


Just CauseJust CauseConsequencesConsequences

The party terminating the contract with valid The party terminating the contract with valid reason reason (innocent party)(innocent party) is is not liable to pay liable to pay compensationcompensation or to suffer or to suffer sporting sanctionssporting sanctions. .

The party responsible for the breach of contract The party responsible for the breach of contract (guilty party)(guilty party) is liable to pay is liable to pay compensationcompensation to to the innocent party and may suffer the innocent party and may suffer sporting sporting sanctions.sanctions.


Just cause for a PlayerJust cause for a Player No payment or late payment of No payment or late payment of

salarysalary• Player shall put the Club in default;Player shall put the Club in default;• No need of a financial hardship of the No need of a financial hardship of the

player;player;• Just cause denied if amount Just cause denied if amount

insubstantialinsubstantial or completely secondary. or completely secondary. Player excluded from training Player excluded from training

(personality right Art. 28 CC)(personality right Art. 28 CC) Parties autonomy: buy-out clauseParties autonomy: buy-out clause


Just cause for a ClubJust cause for a Club Club shall put the Player in default;Club shall put the Player in default; Player does not offer his services; Player does not offer his services; Unjustified absence of the Player;Unjustified absence of the Player; Player plays on purpose under his possibility;Player plays on purpose under his possibility;• Difficult to prove;Difficult to prove;• But But notnot if Player does not have a certain level. if Player does not have a certain level. Serious misconduct of the Player (e.g. Serious misconduct of the Player (e.g.

consume of cocaine).consume of cocaine). Permanent incapacity of the Player?Permanent incapacity of the Player?


Art. 17 Consequences of terminating Art. 17 Consequences of terminating a contract without just causea contract without just cause

The following provisions apply if a contract is terminated without The following provisions apply if a contract is terminated without just cause:just cause:

1. In all cases, the party in breach shall pay compensation. 1. In all cases, the party in breach shall pay compensation. Subject to the provisions of Art. 20 and annex 4 in relation Subject to the provisions of Art. 20 and annex 4 in relation to Training Compensation, and unless otherwise provided to Training Compensation, and unless otherwise provided for in the contract, compensation for breach shall be for in the contract, compensation for breach shall be calculated with due consideration for the law of the country calculated with due consideration for the law of the country concerned, the specificity of sport, and any other objective concerned, the specificity of sport, and any other objective criteria. These criteria shall include, in particular, the criteria. These criteria shall include, in particular, the remuneration and other benefits due to the player under remuneration and other benefits due to the player under the existing contract and/or the new contract, the time the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five remaining on the existing contract up to a maximum of five years, the fees and expenses paid or incurred by the years, the fees and expenses paid or incurred by the Former Club (amortised over the term of the contract) and Former Club (amortised over the term of the contract) and whether the contractual breach falls within a Protected whether the contractual breach falls within a Protected Period.Period.



“The following provisions apply if a contract is terminated without just cause:1. In all cases, the party in breach shall pay compensation. (…)”

Compensation is due inside or outside the Compensation is due inside or outside the protected period.protected period.

Every termination of contract, even outside Every termination of contract, even outside the protected period, remains a the protected period, remains a serious serious violationviolation of the contract. of the contract.

Breach without termination of contract? Breach without termination of contract? Compensation based on Swiss law.Compensation based on Swiss law.



““Subject to the provisions of Art. 20 and annex Subject to the provisions of Art. 20 and annex 4 in relation to Training Compensation, (…)”4 in relation to Training Compensation, (…)”

Training compensation is:Training compensation is:- not payable, if the club has terminated the not payable, if the club has terminated the

contract without just cause;contract without just cause;

- payable, if the player has terminated the payable, if the player has terminated the contract without just cause (in addition to contract without just cause (in addition to compensation for the breach).compensation for the breach).



““(…) and unless otherwise provided for (…) and unless otherwise provided for in the contract, (…)”in the contract, (…)” Buy out clause:Buy out clause: Liquidated damages Liquidated damages

provision. Party autonomy.provision. Party autonomy.• However: However: Art. 163.3 COArt. 163.3 CO the judge shall reduce the judge shall reduce

excessively high penalty clause or liquidated excessively high penalty clause or liquidated damage (damage (ordre public ordre public – excessive legal – excessive legal commitments) commitments)

• Sport legislation of certain countries (e.g. Spain, Sport legislation of certain countries (e.g. Spain, Real Decreto 1006Real Decreto 1006): compulsory buy-out-clause. ): compulsory buy-out-clause.

• Forbidden in other countries because not Forbidden in other countries because not compatible with mandatory labour law.compatible with mandatory labour law.



““(…) compensation for breach shall be (…) compensation for breach shall be calculatedcalculated with due considerationwith due consideration - for thefor the lawlaw of the country concerned,of the country concerned, - thethe specificity of sportspecificity of sport, , - and any otherand any other objective criteriaobjective criteria.. (…)” (…)”

- Discretionary power of the Discretionary power of the deciding authoritydeciding authority


Law of the country concerned Law of the country concerned Law governing the employment Law governing the employment

relationship; closest connection to dispute.relationship; closest connection to dispute. Law of the country of the club, where the Law of the country of the club, where the

contract was stipulated and performedcontract was stipulated and performed• Often no tailor-made solution for sport;Often no tailor-made solution for sport;• Corrective effect for compensation?Corrective effect for compensation?• To be considered – not to be applied;To be considered – not to be applied;• Parties‘ submissions mainly based on RSTPParties‘ submissions mainly based on RSTP

Art. R58 CAS Code, result: Swiss law Art. R58 CAS Code, result: Swiss law applying applying by defaultby default..


Specificity of SportSpecificity of Sport Over the years, the Over the years, the EUEU has produced some has produced some

colourful jargon to describe various colourful jargon to describe various concepts. concepts.

The term The term “specificity of sport”“specificity of sport” has has entered into common jargon to refer to the entered into common jargon to refer to the special nature and characteristics of special nature and characteristics of sportsport recognised in the recognised in the Nice DeclarationNice Declaration on Sport of December 2000. on Sport of December 2000.


Specificity of SportSpecificity of Sport Is the solution reached Is the solution reached just and fair just and fair

under civil law as well as considering the under civil law as well as considering the sporting intests of the entire football sporting intests of the entire football community?community?

Consider the specific nature of the Consider the specific nature of the damages caused by the breach of contract damages caused by the breach of contract (player as asset from a sportive and (player as asset from a sportive and commercial point of view);commercial point of view);

Corrective effect – Corrective effect – subordinated in subordinated in relation to other damages awarded. No relation to other damages awarded. No punitive or enriching character.punitive or enriching character.


The Objective CriteriaThe Objective Criteria

““These criteria shall include, in particular,These criteria shall include, in particular,- the remuneration and other benefits due the remuneration and other benefits due

to the player under the existing contract to the player under the existing contract and/or the new contract, (…)”and/or the new contract, (…)”

Indication on:Indication on: the value of the services of the player the value of the services of the player

• for the former clubfor the former club• the new club the new club

the market value of the services of playerthe market value of the services of player motives behind the unjustified terminationmotives behind the unjustified termination



““These criteria shall include, in particular,These criteria shall include, in particular,(…)(…)

- the time remaining on the existing the time remaining on the existing contract up to a maximum of five years, contract up to a maximum of five years, (…)”(…)”

- Linked to the specificity of sport.Linked to the specificity of sport.- Every breach of contract is reproachable, Every breach of contract is reproachable,

even more if the contract had still a even more if the contract had still a substantial duration (aggravating factor).substantial duration (aggravating factor).



““These criteria shall include, in particular,These criteria shall include, in particular,(…)(…)

- the fees and expenses paid or incurred by the fees and expenses paid or incurred by the Former Club (amortised over the term the Former Club (amortised over the term of the contract) (…) “of the contract) (…) “

- Refers only to the Club’s damage.Refers only to the Club’s damage.- Will be dealt with later in the part: Will be dealt with later in the part:

“Damage suffered by the Club”“Damage suffered by the Club”



““These criteria shall include, in particular, (…)These criteria shall include, in particular, (…)- whether the contractual breach falls within a whether the contractual breach falls within a

Protected Period.”Protected Period.”- Protected period:Protected period: 3 years or 3 seasons 3 years or 3 seasons

from entry into force of the contract from entry into force of the contract (players over 28: 2 years or 2 seasons) (players over 28: 2 years or 2 seasons)

- Breaches within protected period are Breaches within protected period are considered a considered a particular serious form of particular serious form of unlawful behaviourunlawful behaviour (cf. sporting sanctions (cf. sporting sanctions in Art. 17.3-5 RSTP): in Art. 17.3-5 RSTP): aggravating factor aggravating factor - - increasing effect.increasing effect.


The Objective CriteriaThe Objective Criteria Non exhaustive enumeration in Art. 17.1.Non exhaustive enumeration in Art. 17.1. Criteria cover a number of categories of Criteria cover a number of categories of

cases.cases. Not all criteria applicable for every case.Not all criteria applicable for every case. Combination of criteria not always Combination of criteria not always

possible.possible. Some apply to clubs others to players.Some apply to clubs others to players. Art. 17 applies to clubs and players: no Art. 17 applies to clubs and players: no

category shall be favorized. category shall be favorized.


Assesment of various criteriaAssesment of various criteria

The The judgejudge shall assess the various shall assess the various criteria in his discretion, having criteria in his discretion, having regard to the ordinary course of regard to the ordinary course of events, the behavior of the parties events, the behavior of the parties and the measures taken by the and the measures taken by the damaged party.damaged party.

No „ranking“ among the criteria.No „ranking“ among the criteria.


Scope of CompensationScope of Compensation Positive interest Positive interest (expectation (expectation

interest): the innocent party shall be interest): the innocent party shall be put in the same position as if the put in the same position as if the contract was performed properly and contract was performed properly and the breach did not occur.the breach did not occur.

Full compensation of the injured Full compensation of the injured party.party.


Calculation of CompensationCalculation of Compensation The judging authority has a The judging authority has a wide margin wide margin

of appreciationof appreciation when determining the when determining the amount of compensation.amount of compensation.

Compensation shall have:Compensation shall have:• no punitive effectno punitive effect. Sporting Sanctions in Art. . Sporting Sanctions in Art.

17.3 RSTP;17.3 RSTP;• no enriching effect no enriching effect / no overcompensation./ no overcompensation.


Damage suffered by the PlayerDamage suffered by the Player Renumeration until termination, then: Renumeration until termination, then: Compensation of Compensation of positive interestpositive interest: the : the

remainder of the contract.remainder of the contract. No undue enrichment or No undue enrichment or

overcompensationovercompensation• Obligation to mitigation of damageObligation to mitigation of damage• Deduction of remuneration earned with new Deduction of remuneration earned with new

clubclub Art. 337 lit. c §1 & 2 COArt. 337 lit. c §1 & 2 CO


Damage suffered by the ClubDamage suffered by the Club Player cannot be forced to remain with the Player cannot be forced to remain with the

Club against his will.Club against his will. Calculation of damage is a difficult task.Calculation of damage is a difficult task. Fees and expensesFees and expenses paid by the Club paid by the Club

(amortised over the term of the contract)(amortised over the term of the contract)• Transfer feeTransfer fee• Agent’s commission, Agent’s commission, • Signing on fee, etc. Signing on fee, etc.

Training compensation: Training compensation: lex specialislex specialis


Damage suffered by the ClubDamage suffered by the Club

Value of the services of the PlayerValue of the services of the Player What would a club spend on the transfer What would a club spend on the transfer

market to contract the services of an market to contract the services of an analogous player?analogous player?• As salary;As salary;• As transfer fee.As transfer fee.

Offer from third club is indication on the Offer from third club is indication on the value of the services of the player.value of the services of the player.



Loss of earnings Loss of earnings (lucrum cessans)(lucrum cessans) Opportunity to receive a transfer fee.Opportunity to receive a transfer fee. Only if concrete offer and the Player Only if concrete offer and the Player

agreed to the transfer.agreed to the transfer. If compensation for lost transfer fee is If compensation for lost transfer fee is

recognized, no compensation for the loss recognized, no compensation for the loss of the value of the services of the player, of the value of the services of the player, otherwise over-compensation.otherwise over-compensation.



Additional damageAdditional damage: Art. 42–44 CO: Art. 42–44 CO Replacement expensesReplacement expenses: prove that the : prove that the

new player was hired in substitution of the new player was hired in substitution of the other player (same position, need of other player (same position, need of substitution, etc.);substitution, etc.);• injured Club has to mitigate the damage while injured Club has to mitigate the damage while

replacing the player. replacing the player. • Replacement shall be reasonable from a Replacement shall be reasonable from a

sportive and economical point of view, sportive and economical point of view, otherwise the compensation can be reduced.otherwise the compensation can be reduced.


Damage suffered by the ClubDamage suffered by the ClubAdditional damageAdditional damage: Art. 42–44 CO: Art. 42–44 CO Other additional damageOther additional damage

• Who claims damage must prove itWho claims damage must prove it Sporting and commercial losses Sporting and commercial losses following following

departure of Player difficult to quantify departure of Player difficult to quantify (termination of sponsoring contract?)(termination of sponsoring contract?)

• If exact amount of damage cannot be If exact amount of damage cannot be established, the judge must asses it in established, the judge must asses it in his discretion his discretion having regard to the having regard to the ordinary course of events.ordinary course of events.


Damage suffered by the ClubDamage suffered by the ClubCalculation in the CAS case lawCalculation in the CAS case law

• MatuzalemMatuzalem Value of the services of the playerValue of the services of the player Less the savings madeLess the savings made Add the specificity of sportAdd the specificity of sport

• HadaryHadary Value of the services of the playerValue of the services of the player Less the savings madeLess the savings made NoNo specificity of sport specificity of sport

• De SanctisDe Sanctis Replacement costReplacement cost Less the savings madeLess the savings made Add the specificity of sportAdd the specificity of sport


ConclusionsConclusions Every case shall be assessed as to its own Every case shall be assessed as to its own

merits.merits. CAS procedure is an CAS procedure is an adversarial system adversarial system

and not an inquisitorial one, i.e. the parties and not an inquisitorial one, i.e. the parties shall:shall: substantiatesubstantiate their allegations; their allegations; discharge discharge their burden of proof.their burden of proof.

Buy-out-clause (reasonable)Buy-out-clause (reasonable) Otherwise, risk of going to a dispute.Otherwise, risk of going to a dispute.


Contractual stability between players and Contractual stability between players and clubs in the light of Art. 17(1) RSTPclubs in the light of Art. 17(1) RSTP

Thank you for your attention !Thank you for your attention !

Questions & AnswersQuestions & Answers

Gianpaolo Monteneri Gianpaolo Monteneri tel. +41 44 491 55 33tel. +41 44 491 55 33fax +41 44 491 55 34fax +41 44 491 55 [email protected]@monteneri.com

contractual stability between players and clubs in the light of art. 17(1) rstp

Documents

applicable law

applicable regulations

fifa statutes cas

various regulations

causea contract

respect of contracta

r58 cas code of sport

fc shakhtar donetsk