11.04.2024

CAS 2022/A/8621* is a recent award with several interesting determinations in relation to the interpretation of arbitration clauses, the request for a partial award for the unchallenged portion of a final and binding decision, the de novo principle and the scope of res judicata. Also, there are interesting considerations regarding the fulfilment of the conditions for bonus and conditional payments.

Following the issuance of a decision by the FIFA DRC regarding compensation, the Player submitted an appeal before CAS.

Several issues were examined, connected to both procedural and substantive aspects of the case.

1. The competence of CAS to hear the claim arising from the IRA 

The Claims of the Player before CAS stemmed from amounts arising both from the Employment Contract and from an Image Rights Agreement (IRA) signed between the Player and the Club.

The question was whether the CAS had jurisdiction to hear the claims arising from the IRA.

The jurisdiction clause of the IRA stipulated that the agreement was governed by Swiss law, and all the relevant disputes shall be exclusively resolved “by the courts of Lausanne, Switzerland”.

The Sole Arbitrator underlined the following:

1. The term “courts” typically refers to state courts.
2. The jurisdiction clause did not provide for “an express waiver to the national courts”. Under Swiss Law, the exclusion of all recourse to state courts is a key requirement for a valid arbitration clause.
3. CAS is an arbitral tribunal and not a court in the proper sense of Swiss law.
4. The application of the jurisdiction clause contained in the employment contract did not extend to the IRA, because the IRA contained a separate and different jurisdiction clause.

Therefore, the claim in connection with the IRA was rejected.

2. Request for a partial award 

The Player requested the issuance of a partial award regarding the amounts awarded by the FIFA DRC that were not challenged through the appeal.

This request was aimed at an “expedited” decision regarding the amounts awarded by the FIFA DRC, in order to proceed with the enforcement of the FIFA DRC decision by FIFA.

The Sole Arbitrator stated that CAS did not have the competence to issue a partial award for the non-appealed portion of the FIFA DRC decision, because his mandate was limited to the matter in dispute before him. Since this amount was not disputed by the Club or by the Player, it had become final and binding and the Sole Arbitrator was not empowered to issue a partial award.

The Sole Arbitrator stated that, If the Appellant wanted to challenge the suspension of the enforcement, he should have “lodged an appeal against the decision of the FIFA Disciplinary Committee” to suspend the enforcement of the final and binding portion of the FIFA DRC decision.

3. Admissibility of a submission filed after the expiry of a time limit 

The Appellant missed the deadline to timely submit his Reply.

Nevertheless, the Sole Arbitrator noted that the Appellant explained that the delay was caused by medical reasons and also considered that the delay was minimal (1 day) and that no prejudice was caused by the delay to the Respondent’s right to be heard. Thus accepted the late submission.

4. Presentation of new claims at appeal level

Before the FIFA DRC, the Appellant was awarded compensation only for the remainder of the contract until the end of the 2021 football season. The bonus payment and the compensation arising from the potential automatic extension of the contract were requested but the claim was rejected.

Nevertheless, when the Appeal was lodged before CAS, the Club had achieved its promotion to the first division.

In view of this development, the Player requested in its appeal:

1. the bonus payment for the promotion;
2. that CAS recognises that his contract would be automatically renewed and that his remuneration for the 2022/23 season would be doubled.

The Sole Arbitrator stated that, under the de novo principle (art. R57 CAS Code), CAS shall examine new facts and evidence presented before it that were not available at the previous instance. He stated however that this does not empower an appellant to change the matter in dispute vis-a-vis the first instance.

Moreover, the Sole Arbitrator made reference to CAS 2012/A/2874, in which it was determined that:

“…claims that could, for legitimate reasons, not have been advanced in previous litigation, but were likely to have been claimed in the absence of such legitimate reasons at the time, do fall under the de novo competence of CAS Panels and should hence be considered as admissible”. 

This would introduce an exception to the restrictions of the scope of review of CAS.

Nevertheless, the Sole Arbitrator noted that the matter of dispute before CAS had not changed (the termination of the contract without just cause and the compensation for the termination of the contract), but only the quantum. 

Since the core of the claim before the DRC and CAS was identical, the Sole Arbitrator was mandated to adjudicate both claims.   

5. Scope of res judicata

The Sole Arbitrator underlined that the res judicata effect of the FIFA DRC decision – which was not appealed by the Club – was limited to the operative part of the decision only and not to its reasoning.

The operative part of the FIFA decision did not state that the Club terminated the contract without just cause.

Therefore, CAS was not bound by the respective reasoning of the FIFA DRC about the termination of the contract.

6. Calculation of the compensation for breach of contract

Having established that the Club terminated the Contract without just cause, the Sole Arbitrator proceeded with the calculation of the compensation payable to the Appellant.

The interesting part is the one related to the bonuses, the automatic extension of the contract and the doubling of the remuneration of the Player in case of a promotion to the first division.

Against the argument that the said bonus was performance-related, the Sole Arbitrator stated that the Club terminated the contract without just cause, depriving the Player of the possibility to contribute to the promotion of the Club. Since the Club prevented the condition from materialising, the Club should be treated as if the condition had materialised in full.

Furthermore, the Sole Arbitrator determined that the season of the contract extension shall be taken into account when calculating the residual value of the contract. Since the contract had not “expired” before the achievement of promotion but rather the club unilaterally terminated the contract against its contractual obligations, the Club cannot escape from this obligation.

*A brief presentation of the CAS 2022/A/8621 was published in the CAS Bulletin 2024/1.