FIFA DRC: Defining contractual payments and the validity of a waiver

FIFA DRC: Defining contractual payments and the validity of a waiver

AP Sports Law Office successfully represented a Greek football club before FIFA, against the Claim of a Player for alleged overdue payables from his employment contract. The main questions posed to the chamber were the definition of contractual payments and the validity of a waiver.
 

The facts of the case

The Player and the Club signed a 3-year employment contract. The Player was registered with the Club from January 2022 until August 2022. Then, he was loaned to a club from a different football association until May 2023. He was re-registered with the Club until July 2023, when he was eventually permanently transferred to a club from a third different football association, on the power of a tripartite transfer agreement. The transfer agreement did not refer to any amounts potentially owed or payable by the Club to the Player. 

After the termination of their employment relationship, the Player claimed overdue payables arising from salaries and instalments provided in the employment contract.

The FIFA DRC had to decide on the following issues:

(a) What is the nature of the payments not specifically defined in the employment contract? Are these amounts sign-on-fee payments or are they part of the player’s remuneration for his services? 

(b) Were these payments payable during the suspension of the employment contract with the Club (during the loan transfer of the Player?)

(c) The validity of a waiver of a specific payment, signed by the Player as part of the Loan Agreement (for an amount that was payable on the day of signing of the loan agreement).

The nature of the undefined payments of the contract

Firstly, the FIFA DRC had to decide on the nature of the undefined payments (“instalments”) in the employment contract. The Player asked for the said payments (“instalments”) to be identified as sign-on fee payments. This would have as a consequence the Club being liable to pay these instalments regardless of whether the Player had provided his services to the Club or not (during the loan transfer and after the termination of the Contract). The said amounts were not payable monthly (like the payments defined as “salaries” in a different article of the contract) but in 3 instalments per year. 

The DRC interpreted the Contract considering its wording and the arguments and evidence presented by the parties. As a result, it found that the Club had established that the undefined payments were indeed part of the Player’s remuneration and not payments arising from a sign-on fee.  

Due payments for the term of the loan transfer and after the termination of the contract

Subsequently, the DRC found that, for the duration of the loan transfer, the employment contract between the Club and the Player was suspended and no payments were due by the Club to the Player. It underlined that, if the parties intended to reach a different agreement, they should have done so in writing. The same rationale was adopted regarding the amounts claimed by the Player for the period after the termination of the employment contract. If the parties had wished to set any residual credit to the Player following the termination of the contract, they should also have done so in written form. All in all, no amounts were payable to the Player during his loan transfer and after the termination of the contract. The DRC found that the Player should receive only pro rata payments for the days he was registered with the Club between his return from loan and his permanent transfer. 

The validity of the waiver of a payment by the Player

The Chamber noted that the Player (as part of his loan transfer) waived an instalment arising from the employment contract, which fell due exactly on the date that the loan agreement was signed. 

In accordance with the well-established jurisprudence of the FIFA Football Tribunal and CAS, waivers from salaries (and generally payments) for work already performed are not valid and thus they are not accepted.  

Nevertheless, the Chamber found that, in order to assess whether a transaction is permissible, the deciding body is required to conduct a balancing of interests, checking whether there is an appropriate equivalence between the parties’ reciprocal concessions. Considering the above, as well as the behaviour of the Player, the DRC found that the waiver included in the Loan Agreement involved reciprocal concessions by the Parties.

 “The Club accepted to loan the Player to another club free of costs, whereas the Player committed to seek new opportunities in  a different country, for a slightly higher remuneration, however at the expense of one of the instalments of the contract”. 

 

Therefore, the DRC found that the waiver was valid and binding.